This article has been written by Navtej Kakran, pursuing a Certificate Course in Advanced Criminal Litigation & Trial Advocacy from LawSikho.

Introduction

Order 8 Rule 1 of Code Of Civil Procedure, 1908 provides for a time limit for filing of written statements by the defendant. The procedural provision provides appropriate time to the defendant for filing a written statement after delivery of the summons and also ensures that it is not misused by the defendant to harass the plaintiff by using this provision to delay the proceedings.

The provision states that once a summon is issued, then the defendant is given 30 days to submit his reply called a written statement (subject to delivery of the summon to the defendant). If the defendant does not file the written statement within 30 days, then the time period for submitting a written statement can be extended up to 90 days and reasons for the extension have to be recorded by the court. 

Answering the dilemma

Order VIII Rule 1 of Code of Civil Procedure 1908 provides for a time limit of a maximum of 120 days for filing written statements after the service of summons is complete. Whether it is mandatory or directory depends on the nature of the transaction or the subject matter of the case.

The interpretation of the said Order can be seen in the catena of judgments by the Hon’ble Supreme Court. The Supreme Court has clearly stated that the maximum time provided for filing of written statements cannot exceed 120 days (30 days after delivery of summons + 90 days grace period). The restriction in this provision is strictly applicable to commercial suits only. In commercial suits the time limit to file written statements within 90 days, is mandatory. The Commercial Courts Act, enacted in 2015 provides for amendment of Order VIII Rule 1 under Code Of Civil Procedure for commercial suits, making mandatory filing of written statements within 90 days after summon has been received by the defendant.

It can be said that in non-commercial suits the time limit to file a written statement under Order VIII Rule 1 of the code is a directory and not mandatory. It means that it is up to the court’s discretion to provide additional time beyond 120 days and depends on case to case basis. Some relaxation is provided by law to non-commercial suits due to the fact that subject matter in dispute (amount or property value) is not always high and also the risk is limited to specific individuals. Whereas in commercial suits, the disputed matter is of high value along with a high-risk factor pertaining to hundreds of employees of a company. The article will talk about the time limit to file written statements under CPC in both commercial and non-commercial suits in the light of case laws.

A. Commercial suits

M/s SCG Contracts India Pvt. Ltd. v/s KS Chamankar infrastructure Pvt. Ltd.

In “M/s SCG Contracts India Pvt. Ltd. v/s KS Chamankar infrastructure Pvt. Ltd. (C.A 1638/2019)“, the Hon’ble Supreme Court of India has held that it is mandatory to file a written statement in a commercial suit within 120 days from the date of service of summoning the defendants. In case the defendant fails to submit a written statement within 120 days, then his right to submit a reply is forfeited. In such a scenario, even the court cannot extend the time limit by using its inherent powers under Section 151 of CPC. Therefore, it can be said that in commercial suits, the time limit to file written statements under VIII Rule 1 of the Code Of Civil Procedure is mandatory. 

Brief facts of the case

• The M/s SCG Contracts India Pvt. Ltd. (“Appellant”) filed a suit against M/s K.S. Chamankar Infrastructure Pvt. Ltd. (“Respondent”) before the Hon’ble High Court of Delhi. The claimed amount was a sum of approx. Rs. 6,94,63,114/-. If the subject matter of a suit is a commercial dispute then it comes under the ambit of the Commercial Courts Act. As a result, the suit was filed before the Commercial Division of Delhi High Court.  
• As per the facts of the case, the summon was received by the respondent of the aforesaid suit on 14.07.2017. Therefore, as per the proviso of Order V Rule 1 and the proviso of Order VIII Rule 1 of Code of Civil Procedure, 1908, the Respondent was obliged to file its written statement maximum within 120 days to be calculated from 14.07.2017, which expired on 11.11.2017.
• The respondent did not file its written statement till 11.11.2017 and instead filed an application under Order VII Rule 11 seeking rejection of the suit which was rejected by the High Court vide its order dated 05.12.2017, though granted the respondent time till 15.12.2017 for filing the written statement subject to cost of Rs. 25,000/-.
• The respondent filed the written statement on 15.12.2017, however, on 06.08.2018, an objection was raised citing amendments made to the Code, by the enactment of the Commercial Courts Act, 2015 on 23.12.2015. 
• Therefore, the written statement could not be recorded. The High Court, vide its order 24.09.2018, however, held that order dated 05.12.2017 being final, the written statement should be taken on record. Aggrieved by the aforesaid two orders dated 05.12.2017 and 24.09.2018, the appellant filed the appeal before the Hon’ble Apex Court.

The issues before the Hon’ble Apex Court

1. Whether the written statement submitted after the time limit of 120 days in a commercial suit can be allowed? 
2. Whether an application under Order VII Rule 11 seeking rejection of suit can be considered for the pendency of suit?

Judgment of the apex court

1. The Hon’ble Supreme Court held that as per the Commercial Courts Act, 23.10.2015 along with proviso of Order V Rule 1 and Order VIII Rule 1 of Code of civil procedure, there exists a strict obligation on the defendant to file a written statement within 120 days of service of summoning.
2. The Apex court also held that pendency of application under Order VII Rule 1 to reject the plaint cannot be considered a valid reason for not filing a written statement within 120 days.
3. The Apex court also held that “not even the courts can use their inherent power vested to them under Section 151 of the code to bypass or allow the filing of written submission after the lapse of 120 days from the service of summons.”

The Hon’ble court in its above decision has strictly maintained that the time limit of 120 days for filing written statements after delivery of the summons to the defendant has to be respected in each case. Commercial matters are of high value and they need to be disposed of efficiently. The delay in commercial matters directly affects not only the operations of the company and employees but also the “Ease of business” factor in the country. Unnecessary delay may cause a lack of investor confidence and as a result global reputation of a country. Even Section 151 which gives the court its inherent powers is also made unavailable to courts when dealing with commercial matters for extending the time limit beyond 120 days. Very strong exceptional reasons will be considered for extending the time limit and that will depend on the facts and circumstances of each case. It can however be rightly said that such a decision by the apex court has helped in the quick disposal of commercial cases.

B. Non-commercial suits

The suits whose subject matter is not a commercial dispute are termed non-commercial suits. In these types of suits, Supreme Court has explicitly stated that “Time limit to file written statement under Order VIII Rule 1 of Code Of Civil Procedure, 1908 is a directory and not mandatory.” The court on reasons to be recorded can extend the time limit beyond the 90-day grace period as well. The Hon’ble Supreme court has stated that “in only exceptional and rare cases such type of extension shall be provided. It should not become a routine manner to grant extension as it may result in misuse and can be used as a part of delay tactics”. The apex court has reiterated that the time limit provided by Order VIII Rule 1 is to expedite the hearing and not to stall it. Therefore, only in rare cases extension beyond 90 days should be granted and reasons for extending the period shall be recorded in writing.

• In Salem Advocate Bar association v/s Union of India AIR 2005 SC 3353, the Apex court has held that the court can grant an extension after the expiry of the 90-days period under Order VIII Rule 10 but it should not grant such an extension so frequently. Therefore, the time limit to file a written statement under Order VIII Rule 1 is a directory and mandatory.
• In Atcom Technologies Ltd. v/s Y.A Chunawala and co. (2018) 6 SCC 639, the Hon’ble Apex court reiterated that the court can grant an extension for filing written statements after the expiry of 90 days in exceptional cases. The defendant shall provide very strong valid reasons to the court for requesting the extension of the 90-day period.
• In Deshraj v/s Balkishan 2020, the Hon’ble supreme court reiterated the dictum laid down in the case of Atcom tech Ltd. v/s Y.A Chunawala 2018, for filing of the written statement in non-commercial suits. The Supreme Court again emphasized the exceptional circumstances of a case as a valid reason for granting permission for filing a written statement after the expiry of 90 days.

Conclusion

The Hon’ble Supreme court has interpreted the provisions of the Code of Civil Procedure which protects the right of the defendant and also provides for the speedy delivery of justice to the plaintiff. The Supreme Court has explicitly interpreted the provisions relating to commercial suits and non-commercial suits. The nature of commercial suits affects the company which may further affect the operations and employees of the company. The transaction value is usually high in commercial suits and that is why it is necessary to make arrangements for speedy justice to the plaintiff. The provisions have been laid down in the Code Of Civil Procedure accordingly. Therefore, the time limit for filing written statements under Order VIII Rule 1 of the Code Of Civil Procedure is mandatory and not a directory. The provision is to help both the plaintiff and the defendant both. The plaintiff is being protected from intentional or unnecessary delay and on other hand, the defendant is provided appropriate time to prepare and file a written statement within the prescribed period.

In the case, of non-commercial suits, some flexibility is allowed under the provision but only in exceptional cases. The defendant has to provide a valid reason for granting permission to file a written statement after the expiry of 90 days laid down under Order VIII Rule 1 of the Code of Civil Procedure, 1908. The court will then validate the reason given by the defendant and after analysing the facts of the case, the court will pass an order as it deems fit and proper. Therefore, the provisions have no room for ambiguity and are clearly expressed by the catena of Supreme Court judgments.

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