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ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION (L) NO. 27197 OF 2023
IN
COMMERCIAL SUIT NO. 201 OF 2022
Oriental Insurance Company
IN THE MATTER BETWEEN :-
Sunrise Biscuit Company Pvt. Ltd.
Pub Boragaon Gotanagar, Guwahati-781033 … Plaintiff
Ms. Jaya Shukla i/b Ms. Jyoti Bajpayee, Advocate for the
Applicant/Defendant in IAL/27197/2023.
Ms. Ria Lulla a/w Ms. Komal Joshi, Mr. Pushkraj Deshpande, Mr.Ashwin Hirulkar i/b ALMT Legal, Advocates for the
Plaintiff/Respondent in IAL 27197/23.
ORAL JUDGMENT
1. On 10th April, 2024 the matter was heard. However, it has been listed today for Ms. Jyoti Bajpayee, learned Counsel for the Applicant to ksg 1/16 furnish authorities in support of her contention that the proceeding before this Court is in continuation of the proceeding before the Delhi High Court. However, when the matter is called out no authorities have been furnished. Accordingly, this Court proceeds to pass the order.
2. This Interim Application filed on behalf of the Respondent- Insurance Company seeks to recall/setting aside of order dated 13th February, 2023 passed by this court recording that no written statement has been filed in permissible 120 days from the service of writ of summons i.e. on or before 24th December 2022 and that the Commercial Suit be proceeded as an undefended Commercial Suit. That after recalling/setting aside of the aforesaid order, this Court permit the Defendant to file written statement by condoning the delay.
3. Ms. Jyoti Bajpayee, learned Counsel appears for the Defendant- Applicant Insurance Company and submits that the legal matters with respect to the Defendant are handled by their Mumbai Regional Office II and that although the Defendant was informed that as per order dated 13th February, 2023, writ of summons was served on 26th August, 2022 and the Defendant had not filed their written statement, however despite searches in their office, the Defendant could not trace the writ ksg 2/16 of summons. That the Defendant thereafter, also inquired with the Divisional Office where the Plaintiff appears to have served the writ of summons, however, despite tremendous efforts taken at their end in their Divisional as well as Regional Office, the Defendant could not find out who had accepted the writ of summons on 26th August, 2022.
4. Ms. Jyoti Bajpayee, learned Counsel for the Defendant would further submit that earlier the Plaintiff had filed the suit in the Delhi High Court and as the Defendant had raised an issue of jurisdiction of the Delhi High Court, the Plaintiff had withdrawn the said suit with liberty to file the Suit in the Court of proper jurisdiction in which written statement had also been filed by this Applicant-Defendant and the same was directed to be returned that thereafter, the Plaintiff has filed this suit in this Court. Ms. Jyoti Bajapayee, learned Counsel for the Defendant would submit that since the Defendant had already filed their written statement in the Delhi High Court, in the suit filed by the Plaintiff within limitation there, there should not be any delay in filing the written statement in the suit in this Court in as much as the proceedings in the Delhi High Court are in a way continuation of the proceedings filed by the Plaintiff in the Delhi High Court as no fresh limitation has been considered while filing the suit in the Bombay High Court. ksg 3/16
5. That the Defendant has a good case on merits. That for proper adjudication of the Suit, this court be pleased to condone the delay in filing written statement and allow the Defendant to file their written statement in the above-mentioned suit in the interest of justice.
6. That the balance of convenience is in favour of the Applicant/Defendant. Learned Counsel for the Defendant therefore, submits that the order dated 13th February, 2023 be recalled/set aside and if the said order is not set aside and the Defendant is not allowed to file their written statement, irreparable harm and injury would be caused to the Defendant, which cannot be compensated in terms of money. That on the other hand if the reliefs as prayed for are granted no harm, loss or inquiry will be caused to the Plaintiff.
7. Ms. Bajpayee, learned Counsel therefore submits that this Interim Application be allowed.
8. On the other hand, Mr. Sharan Jagtiani, learned Senior Counsel for the Plaintiff/Respondents in this Application would submit that except an excuse that the Defendant has not been served with writ of summons at its Regional Office there is no other ground made out for recall of the order dated 13th February, 2023. ksg 4/16
9. Mr. Jagtiani, would submit that service of writ of summons has been effected on the Defendant on 26th August, 2022 at the address of the Defendant which is not only in the Insurance Policy at page 51 of the Plaint but also the same address as in the cause title of this Application and, that it cannot be a ground on behalf of the Defendant that the service ought to have been effected at the Regional Office and not the Divisional Office which is an internal matter of the Defendant- Company.
10. Learned Senior Counsel for the Respondent-Plaintiff would submit that the order dated 13th February, 2023 has been correctly passed as no written statement has been filed within the permissible 120 days from the service of writ of summons i.e. on or before 24th December, 2022. Learned Senior Counsel refers to the decision of this Court in the case of Mira Gehani (Applicant) with Axis Bank Limited (Plaintiff) vs. Mira Gehani (Defendants) along with connected matter 1, where this Court in paragraph 111 and 112 has clearly observed that the period 120 days cannot be in any manner extended in a Commercial Suit. Paragraph 111 and 112 of the said judgment is usefully quoted as under:
111. In view of the above notification, it may be argued that in Commercial Suits before this Court, where the Defendant enters its appearance prior to receipt of the summons, the period of 120 days ought to commence from such earlier date viz. the date a Defendant enters its appearance. However, as has been recorded above, this Court is mandated to follow the provisions of the CPC as amended by the Commercial Courts Act whilst adjudicating Commercial Disputes. Hence, as the amendments to Order V Rule 1 and Order VIII Rule 1 now state "...but which shall not be later than one hundred twenty days from the date of service of summons..." the period of 120 days ought to be calculated from the date of service of summons and not the date on which a Defendant enters its appearance as provided for in the above notification. This will not only ensure that the provisions of the Commercial Courts Act are implemented uniformly but also that a Defendant will be made aware of the case it has to meet after being served with the Plaint duly registered with this Court after the removal of all office objections etc. In fact, the Writ of Summons now being served by our Court have the following endorsement: “And you are hereby summoned to file a written statement within 30 days of the service of the present summons and in case you fail to file the written statement within the said period of 30 days, you shall be allowed to file the written statement on such other day, as may be specified by the court for reasons to be recorded in writing and on payment of such costs as the court may deem fit, but which shall not be later than 120 days from the date of service of summons. On expiry of one hundred and twenty days from the date of service of summons, you shall forfeit the right to file the written statement and the court shall not allow the written statement to be taken on record."
112. In view of the above, it is clarified that the period of 120 days will commence from the date of service of the Writ of Summons and not the date a Defendant first enters appearance. In other words, a party or its Advocate/s can no longer rely on the above notification and avoid serving the writ of summons on the Defendant/s. However, in order to ensure expeditious disposal of Commercial Suits and in order to save time of this Court as also the office of Ld. Prothonotary & Senior Master of ksg 6/16 this Court, in the event a Defendant/its Advocate enters appearance and by consent, agrees to waive service, the period of 120 days will commence from the date of such waiver. In such instance, there would be no requirement to serve the Writ of Summons. This will prevent the loss of days involved in serving the Writ of Summons and will expedite commencement of trial and consequently, disposal of Commercial Suits.
11. Learned Senior Counsel therefore submits that there is no substance in the Application and the same be dismissed, however submitting that the Defendants can always cross-examine the Plaintiff’s witness at the time of evidence.
12. I have heard the learned Counsel at length and considered the rival contentions. The relevant facts are not in dispute. The written statement in this Suit is sought to be filed beyond a period of 120 days on the ground that the writ of summons was not served on the Regional office and also on the legal submission that the proceedings before this Court are a continuation of the proceedings before the Delhi High Court. The first submission that the writ of summons was not served on the Regional office which handles legal matters, in my view is certainly not tenable in as much as undisputedly the service of writ of summons has been effected on the Defendant on 26th August, 2022 at the address of the Defendant which is not only in the Insurance Policy at page 51 of the Plaint but also the same address as in the cause ksg 7/16 title of this Application and, that it cannot be a ground on behalf of the Defendant that the service ought to have been effected at the Regional Office and not the Divisional Office which is an internal matter of the Defendant-Company.
13. Further, this Court in the case of Mira Gehani (Applicant) with Axis Bank Limited (Plaintiff) vs. Mira Gehani (Defendants) along with connected matter (supra), has observed that, the 120 days for filing of written statement in Commercial Suits commence from the date of receipt of the summons by the Defendant and that the said provision has been introduced in order to ensure expeditious disposal of Commercial Suits and in order to save time of this Court and that the same cannot be extended under any circumstances.
14. In the case of M/s. SCG Contracts India Pvt. Ltd vs. K.S. Chamankar Infrastructure Pvt. Ltd & Ors[2],, the Hon’ble Supreme Court, after considering the various judgments observed that in view of the substituted provisos to Order V, Rule 1, sub-rule (1) and Order VIII Rule 1 of the CPC and also re-insertion of yet another proviso in Order VIII Rule 10 of the CPC, it was clear that beyond 120 days from the date of ksg 8/16 service of summons, the defendant shall forfeit the right to file the written statement and the court shall not allow the written statement to be taken on record. Paragraph 8 of the said decision is usefully quoted as under:- “8. The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 came into force on 23.10.2015 bringing their wake certain amendments to the Code of Civil Procedure. In Order V, Rule 1, sub-rule (1), for the second proviso, the following proviso was substituted: “provided further that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the written statement on such other days, as may be specified by the Court, for reasons to be recorded in writing and on payment of such costs as the court deems fit, but which shall not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred twenty days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the court shall not allow the written statement to be taken on record. Equally, in Order VIII Rule 1, a new proviso was substituted as follows: “Provided that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the written statement on such other day, as may be specified by the court, for reasons to be recorded in writing and on payment of such costs as the Court deems fit, but which shall not be later than one hundred and twenty days from the date of service of summons and on expiry of one hundred and twenty days from the date of service of summons, the defendant shall forfeit the right to file written statement and the court shall not allow the written statement to be taken on record. ksg 9/16 This was re-emphasized by re-inserting yet another proviso in Order VIII Rule 10 CPC, which reads as under:- “Procedure when party fails to present written statement called for by Court.- Where any party from whom a written statement is required under Rule 1 or Rule 9 fails to present the same within the time permitted or fixed by the Court, as the case may be, the Court shall pronounce judgment against him, or make such order in relation to the suit as it thinks fit and on pronouncement of such judgment a decree shall be drawn up. Provided further that no Court shall make an order to extend the time provided under Rule 1 of this Order for filing of the written statement. A perusal of these provisions would show that ordinarily a written statement is to be filed within a period of 30 days. However, grace period of a further 90 days is granted which the Court may employ for reasons to be recorded in writing and payment of such costs as it deems fit to allow such written statement to come on record. What is of great importance is the fact that beyond 120 days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record. This is further buttressed by the proviso in Order VIII Rule 10 also adding that the Court has no further power to extend the time beyond this period of 120 days.”
15. Next it has been attempted to be argued on behalf of the Defendant that the proceedings before this Court are continuation of the proceedings before the Delhi High Court and, therefore, since a written statement was filed there, the limitation to file written statement before this Court may not be applicable. ksg 10/16
16. Before proceeding further it would be pertinent to refer to the order dated 28th April, 2022 of the Hon’ble Delhi High Court in CS(COMM) 619/2021 of Sunrise Biscuit Company Private Limited vs. Oriental Insurance Company Limited, pursuant to which the plaint in the Suit filed by the Plaintiffs came to be returned in terms of Order VII Rule 10 of the Code of Civil Procedure, 1908 (the “CPC”) and also the written statement alongwith documents filed on behalf of the Defendant were directed to be returned to the Defendant. The relevant portions/paragraphs of the said order are usefully quoted as under:- “2. Upon summons being issued to the defendant, the defendant filed the written statement on 29th March, 2022, wherein the preliminary objection was taken with regard to territorial jurisdiction of this Court.
3. In view of the aforesaid objection, the plaintiffs seek the return of the plaints in the present suits, with liberty to present the same before the Court of competent jurisdiction………..
5. Counsel appearing on behalf of the defendant does not oppose the present applications.
6. Accordingly, the present applications are allowed and the plaints are ordered to be returned to the plaintiffs, in terms of Order VII Rule 10 of the CPC, for filing in the appropriate Commercial Court. The plaintiffs shall appear before the appropriate Commercial Court for filing the present suits within six weeks from today.
7. Subject to the plaintiffs filing the present suit before the appropriate Commercial Court within the time period fixed above, the benefit under Section 14 of the Limitation Act, 1963 would be available to the plaintiffs.” ksg 11/16
10. Further, the Registry is also directed to return the written statement along with the documents filed on behalf of the defendant to the defendant in both the suits.
17. I am afraid that in view of the above facts, the submission on behalf of the Defendant regarding continuation of the proceedings of the Delhi High Court before this Court cannot be accepted in view of the law settled in this regard. In the case of M/s. EXL Careers and Another vs. Frankfinn Aviation Services Private Limited[3], the Hon’ble Supreme Court has after considering the provisions of Order VII Rule 10 and 10A of the CPC clearly observed that return of plaint under Order VII Rule 10 does not mean that the Court returning the plaint did so with the intention for continuance of the suit. The Hon’ble Supreme Court after examining the provisions of Order VII Rule 10 of the CPC has observed that mere use of the words ‘return the file’ cannot enlarge the scope of jurisdiction under Order VII Rule 10 to mean that the High Court has directed so with the intention for continuance of the suit as the intention was for return of the plaint under Order VII Rule 10 of the CPC.
18. The Hon’ble Supreme Court after examining the provisions of Order VII Rule 10 read with Rule 10-A in contradistinction to Section 3 [2020] 6 S.C.R 289 ksg 12/16 24(2) and Section 25(3) of the CPC observed that in view of the statutory scheme of the CPC, in cases dealing with transfer of proceedings from a Court having jurisdiction to another Court, the discretion vested in the Court by Sections 24(2) and 25(3) either to retry the proceedings or proceed from the point at which such proceeding was transferred or withdrawn, is in marked contrast to the scheme under Order VII Rule 10 read with Rule 10-A where no such discretion is given and the proceeding has to commence de novo. The relevant paragraphs of the said decision are usefully quoted as under:-
11. The Civil Judge Gurgaon by his order dated 06.09.2016 rejected the argument with regard to exclusive jurisdiction at Delhi under clause 16B of the Agreement. The High Court in revision on 05.09.2017 set aside the order of the Civil Judge dated 6.9.2016 holding that in view of the clause 16B of the franchise agreement, the Gurgaon court lacked territorial jurisdiction directing return of the file. The submission of the respondent with regard to the advanced stage of the suit at Gurgaon was rejected. Prior thereto, the suit had made substantive progress as in the meantime evidence of the parrties had been closed and the matter has been fixed for final argument on 01.06.2017. We are of the considered opinion that the mere use of the words ‘return the file’ in the order dated 05.09.2017 cannot enlarge the scope of jurisdiction under Order VII Rule 10 to mean that the High Court has directed so with the intention for continuance of the suit. Firstly, that objection was expressly rejected. Secondly the order itself states that the file be returned under Order VII Rule 10 and 10A of the Code. Clearly what the High Court intended was return of the plaint.
19. Order VII Rule 10-A, as the notes on clauses, indicates was inserted by the Code of Civil Procedure (Amendment) Act, 1976 (with effect from 01.02.1977) for reason: ksg 13/16 “New Rule 10-A is being inserted to obviate the necessity of serving summonses on the defendants where the return of plaint is made after the appearance of the defendant in the suit.” Also, under sub-rule (3) all that the Court returning the Plaint can do, notwithstanding that it has no jurisdiction to try the suit is: “10.A. Power of Court to fix a date of appearance in the Court where plaint is to be filed after its return. xxx xxx xxx (3) Where an application is made by the plaintiff under subrule (2), the Court shall, before returning the plaint and notwithstanding that the order for return of plaint was made by it on the ground that it has no jurisdiction to try the suit, — (a) fix a date for the appearance of the parties in the[4] Court in which the plaint is proposed to be presented, and (b) give to the plaintiff and to the defendant notice of such date for appearance.”
20. The language of Order VII Rule 10-A is in marked contrast to the language of Section 24(2) and Section 25(3) of the Code of Civil Procedure which reads as under: “24. General power of transfer and withdrawal. (2) Where any suit or proceeding has been transferred or withdrawn under sub-section (1), the Court which is thereafter to try or dispose of such suit or proceeding may, subject to any special directions in the case of an order of transfer, either retry it or proceed from the point at which it was transferred or withdrawn.
25. Power of Supreme Court to transfer suits, etc. (3) The Court to which such suit, appeal or other proceedings is transferred shall, subject to any special directions in the order of ksg 14/16 transfer, either retry it or proceed from the stage at which it was transferred to it.
21. The statutory scheme now becomes clear. In cases dealing with transfer of proceedings from a Court having jurisdiction to another Court, the discretion vested in the Court by Sections 24(2) and 25(3) either to retry the proceedings or proceed from the point at which such proceeding was transferred or withdrawn, is in marked contrast to the scheme under Order VII read with Rule 10-A where no such discretion is given and the proceeding has to commence de novo.”
19. As noted above, in the facts of this case, the Delhi High Court as in the order dated 28th April, 2022, allowed the plaints to be returned to the Plaintiffs, which includes the Plaintiff herein as well in terms of Order VII Rule 10 of the CPC for filing in the appropriate Commercial Court and in paragraph 10 thereof, the Registry has also directed return of the written statement alongwith the documents filed on behalf of the Defendant. No doubt, the Application for return of the Plaint was made pursuant to the preliminary objection pertaining to territorial jurisdiction of the Delhi High Court taken by the Defendant in its written statement dated 29th March, 2022 filed before the Delhi High Court, pursuant to which the Plaint was returned under Order VII Rule 10 and also the written statement was returned, however, as observed by the Hon’ble Supreme Court in the case of M/s. EXL Careers and Another vs. Frankfinn Aviation Services Private Limited (supra), ksg 15/16 return of Plaint under Order VII Rule 10 of the CPC for filing in the appropriate Commercial Court cannot mean that the Delhi High Court directed the return with the intention for continuance of the suit as under the scheme of Order VII Rule 10 no such discretion is given and the proceeding has to commence de novo.
20. Ergo, the Application made on behalf of the Defendant, the Respondent herein for recalling/setting aside of the order dated 13th February, 2023 is hereby rejected. Needless to say, the Defendant will be at liberty to cross-examine the Plaintiff’s witness(es) at the time of recording of evidence. (ABHAY AHUJA, J.) ksg 16/16