Amarendra Dhari Singh v. R.C. Nursery Private Limited

15. At the outset, one should consider the provision of the CPC as applicable to the non-commercial suit in relation to the timelines for filing of the written statement. Order VIII Rule 1 and Order VIII Rule 10 of the CPC are reproduced hereinbelow:- “ORDER VIII

1. Written Statement.—The Defendant shall, within thirty days from the date of service of summons on him, present a written statement of his defence: 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 same on such other day, as may be specified by the Court, for reasons to be recorded in writing, but which shall not be later than ninety days from the date of service of summons. xxxx

10. 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 the pronouncement of such judgment a decree shall be drawn up.”

16. The above provisions were considered by the Supreme Court in Kailash (supra), and the Supreme Court held that the provision contained in Order VIII Rule 1 of the CPC is procedural; it is not a part of the substantive law. Though the object of Order VIII Rule 1 of the CPC is to curb the mischief of unscrupulous defendants adopting dilatory tactics thereby delaying the disposal of cases, in an adversarial system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. The Supreme Court held that unless compelled by express and specific language of the statute, the provisions of the CPC or any other procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extraordinary situations in the ends of justice. Merely because a provision of law is couched in a negative language implying mandatory character, the same is not without exceptions. The Courts, when called upon to interpret the nature of the provision, may, keeping in view the entire context in which the provision came to be enacted, hold the same to be directory, though worded in the negative form. The Supreme Court further held that in spite of the timelimit appointed by Order VIII Rule 1 of the CPC having expired, the Court is not powerless to permit a written statement being filed if the court may require such written statement. Under Order VIII Rule 10 of the CPC, the court need not necessarily pronounce judgment against the defendant who failed to file written statement as required by Order VIII Rule 1 or Rule 9 of the CPC; the Court may still make such other order in relation to the suit as it thinks fit. I may quote from the judgment as under:-

27. Three things are clear. Firstly, a careful reading of the language in which Order 8 Rule 1 has been drafted, shows that it casts an obligation on the defendant to file the written statement within 30 days from the date of service of summons on him and within the extended time falling within 90 days. The provision does not deal with the power of the court and also does not specifically take away the power of the court to take the written statement on record though filed beyond the time as provided for. Secondly, the nature of the provision contained in Order 8 Rule 1 is procedural. It is not a part of the substantive law. Thirdly, the object behind substituting Order

8 Rule 1 in the present shape is to curb the mischief of unscrupulous defendants adopting dilatory tactics, delaying the disposal of cases much to the chagrin of the plaintiffs and petitioners approaching the court for quick relief and also to the serious inconvenience of the court faced with frequent prayers for adjournments. The object is to expedite the hearing and not to scuttle the same. The process of justice may be speeded up and hurried but the fairness which is a basic element of justice cannot be permitted to be buried.

28. All the rules of procedure are the handmaid of justice. The language employed by the draftsman of processual law may be liberal or stringent, but the fact remains that the object of prescribing procedure is to advance the cause of justice. In an adversarial system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Unless compelled by express and specific language of the statute, the provisions of CPC or any other procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extraordinary situations in the ends of justice. The observations made by Krishna Iyer, J. in Sushil Kumar Sen v. State of Bihar [(1975) 1 SCC 774] are pertinent: (SCC p. 777, paras 5-6) “The mortality of justice at the hands of law troubles a judge's conscience and points an angry interrogation at the law reformer. The processual law so dominates in certain systems as to overpower substantive rights and substantial justice. The humanist rule that procedure should be the handmaid, not the mistress, of legal justice compels consideration of vesting a residuary power in judges to act ex debito justitiae where the tragic sequel otherwise would be wholly inequitable. … Justice is the goal of jurisprudence — processual, as much as substantive.”

30. It is also to be noted that though the power of the court under the proviso appended to Rule 1 Order 8 is circumscribed by the words “shall not be later than ninety days” but the consequences flowing from non-extension of time are not specifically provided for though they may be read in by necessary implication. Merely because a provision of law is couched in a negative language implying mandatory character, the same is not without exceptions. The courts, when called upon to interpret the nature of the provision, may, keeping in view the entire context in which the provision came to be enacted, hold the same to be directory though worded in the negative form.

32. Our attention has also been invited to a few other provisions such as Rules 9 and 10 of Order

8. In spite of the time-limit appointed by Rule 1 having expired, the court is not powerless to permit a written statement being filed if the court may require such written statement. Under Rule 10, the court need not necessarily pronounce judgment against the defendant who failed to file written statement as required by Rule 1 or Rule 9. The court may still make such other order in relation to the suit as it thinks fit.

33. As stated earlier, Order 8 Rule 1 is a provision contained in CPC and hence belongs to the domain of procedural law. Another feature noticeable in the language of Order 8 Rule 1 is that although it appoints a time within which the written statement has to be presented and also restricts the power of the court by employing language couched in a negative way that the extension of time appointed for filing the written statement was not to be later than 90 days from the date of service of summons yet it does not in itself provide for penal consequences to follow if the time schedule, as laid down, is not observed. From these two features certain consequences follow.

41. Considering the object and purpose behind enacting Rule 1 of Order 8 in the present form and the context in which the provision is placed, we are of the opinion that the provision has to be construed as directory and not mandatory. In exceptional situations, the court may extend the time for filing the written statement though the period of 30 days and 90 days, referred to in the provision, has expired. However, we may not be misunderstood as nullifying the entire force and impact — the entire life and vigour — of the provision. The delaying tactics adopted by the defendants in law courts are now proverbial as they do stand to gain by delay. This is more so in election disputes because by delaying the trial of election petition, the successful candidate may succeed in enjoying the substantial part, if not in its entirety, the term for which he was elected even though he may lose the battle at the end. Therefore, the judge trying the case must handle the prayer for adjournment with firmness. The defendant seeking extension of time beyond the limits laid down by the provision may not ordinarily be shown indulgence.

42. Ordinarily, the time schedule prescribed by Order 8 Rule 1 has to be honoured. The defendant should be vigilant. No sooner the writ of summons is served on him he should take steps for drafting his defence and filing the written statement on the appointed date of hearing without waiting for the arrival of the date appointed in the summons for his appearance in the court. The extension of time sought for by the defendant from the court whether within 30 days or 90 days, as the case may be, should not be granted just as a matter of routine and merely for the asking, more so, when the period of 90 days has expired. The extension can be only by way of an exception and for reasons assigned by the defendant and also recorded in writing by the court to its satisfaction. It must be spelled out that a departure from the time schedule prescribed by Order 8 Rule 1 of the Code was being allowed to be made because the circumstances were exceptional, occasioned by reasons beyond the control of the defendant and such extension was required in the interest of justice, and grave injustice would be occasioned if the time was not extended.

43. A prayer seeking time beyond 90 days for filing the written statement ought to be made in writing. In its judicial discretion exercised on well-settled parameters, the court may indeed put the defendants on terms including imposition of compensatory costs and may also insist on an affidavit, medical certificate or other documentary evidence (depending on the facts and circumstances of a given case) being annexed with the application seeking extension of time so as to convince the court that the prayer was founded on grounds which do exist.

44. The extension of time shall be only by way of exception and for reasons to be recorded in writing, howsoever brief they may be, by the court. In no case, shall the defendant be permitted to seek extension of time when the court is satisfied that it is a case of laxity or gross negligence on the part of the defendant or his counsel. The court may impose costs for dual purpose: (i) to deter the defendant from seeking any extension of time just for the asking, and (ii) to compensate the plaintiff for the delay and inconvenience caused to him.\

45. However, no straitjacket formula can be laid down except that the observance of time schedule contemplated by Order 8 Rule 1 shall be the rule and departure therefrom an exception, made for satisfactory reasons only. We hold that Order 8 Rule 1, though couched in mandatory form, is directory being a provision in the domain of processual law.

46. We sum up and briefly state our conclusions as under:

(iv) The purpose of providing the time schedule for filing the written statement under Order 8 Rule 1 CPC is to expedite and not to scuttle the hearing. The provision spells out a disability on the defendant. It does not impose an embargo on the power of the court to extend the time. Though the language of the proviso to Rule 1 Order 8 CPC is couched in negative form, it does not specify any penal consequences flowing from the non-compliance. The provision being in the domain of the procedural law, it has to be held directory and not mandatory. The power of the court to extend time for filing the written statement beyond the time schedule provided by Order 8 Rule 1 CPC is not completely taken away.

(v) Though Order 8 Rule 1 CPC is a part of procedural law and hence directory, keeping in view the need for expeditious trial of civil causes which persuaded Parliament to enact the provision in its present form, it is held that ordinarily the time schedule contained in the provision is to be followed as a rule and departure therefrom would be by way of exception. A prayer for extension of time made by the defendant shall not be granted just as a matter of routine and merely for the asking, more so when the period of 90 days has expired. Extension of time may be allowed by way of an exception, for reasons to be assigned by the defendant and also be placed on record in writing, howsoever briefly, by the court on its being satisfied. Extension of time may be allowed if it is needed to be given for circumstances which are exceptional, occasioned by reasons beyond the control of the defendant and grave injustice would be occasioned if the time was not extended. Costs may be imposed and affidavit or documents in support of the grounds pleaded by the defendant for extension of time may be demanded, depending on the facts and circumstances of a given case.”

17. In Salem Advocate Bar Association, T.N. v. Union of India, (2005) 6 SCC 344, the Supreme Court reiterated that the use of the word ‘shall’ in Order VIII Rule 1 of the CPC by itself is not conclusive to determine whether the provision is mandatory or directory. In construing this provision, support can also be had from Order VIII Rule 10 of the CPC, which gives the power to the Court on failure of the defendant to file written statement within the prescribed time, to pronounce judgment against the defendant or make such other order in relation to the suit as it thinks fit. Vesting of such power in the Court would, therefore, make the provision of Order VIII Rule 1 of the CPC providing for the upper limit of 90 days to file the written statement as directory. I may quote from the judgment as under:-

18. The provisions again came up for interpretation before the Supreme Court in Atcom Technologies Limited v. Y.A. Chunawala and Company and Others, (2018) 6 SCC 639, wherein, the Supreme Court reiterated as under:-

19. At this stage, one should also take note of the amendments carried out in the CPC for the purposes of the Commercial Suits of Specified Value in the Commercial Courts Act, 2015. The amended provisions of Order VIII Rule 1 and 10 read as under:- “ORDER VIII

1. Written statement.-The defendant shall, within thirty days from the date of service of summons on him, present a written statement of his defence: 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 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. xxxx

10. 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 the pronouncement of such judgment a decree 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. (Emphasis Supplied)

20. These special provisions in the Commercial Courts Act came up for consideration before the Supreme Court in SCG Contracts (India) Private Limited v. K.S. Chamankar Infrastructure Private Limited and Others, (2019) 12 SCC 210, wherein, the Supreme Court laying emphasis on the amendments carried out in the provisions of the CPC, held as under:- “8……. 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 8 Rule 10 also adding that the court has no further power to extend the time beyond this period of 120 days.”

21. The Supreme Court in Desh Raj (supra) has held that the judgment in SCG Contracts (India) Private Limited (supra) having been rendered in the context of commercial disputes, would not apply to noncommercial disputes, which shall continue to be governed by the unamended Order VIII Rule 1 of the CPC, which has been interpreted to be directory and as not taking away the inherent discretion of the Courts to condone certain delays.

22. In light of the above, I would now proceed to determine the intent of and the interpretation to be placed to Rule 2(i) and Rule 4 of Chapter VII of the Rules. The same are quoted hereinunder:- “CHAPTER VII

2. Procedure when defendant appears.—If the defendant appears personally or through an Advocate before or on the day fixed for his appearance in the writ of summons:—

(i) where the summons is for appearance and for filing written statement, the written statement shall not be taken on record, unless filed within 30 days of the date of such service or within the time provided by these Rules, the Code or the Commercial Courts Act, as applicable. An advance copy of the written statement, together with legible copies of all documents in possession and power of defendant, shall be served on plaintiff, and the written statement together with said documents shall not be accepted by the Registry, unless it contains an endorsement of service signed by such party or his Advocate. The written statement shall also contain a statement certifying authenticity of document(s) filed. Where copy(ies) of document (s) are filed, it shall be specified in the index as to in whose custody, power and control are the original(s) thereof. Service of summons for the purpose of this Rule shall only be deemed to be complete after inspection is provided by the Plaintiff, if such inspection is sought by an application moved within a period of 7 days from the receipt of first set of summons. xxxx

4. Extension of time for filing written statement.—If the Court is satisfied that the defendant was prevented by sufficient cause for exceptional and unavoidable reasons in filing the written statement within 30 days, it may extend the time for filing the same by a further period not exceeding 90 days, but not thereafter. For such extension of time, the party in delay shall be burdened with costs as deemed appropriate. The written statement shall not be taken on record unless such costs have been paid/ deposited. In case the defendant fails to file the affidavit of admission/ denial of documents filed by the plaintiff, the documents filed by the plaintiff shall be deemed to be admitted. In case, no written statement is filed within the extended time also, the Registrar may pass orders for closing the right to file the written statement.” (Emphasis supplied)

23. A reading of the above provision would show that the written statement shall not be taken on record, unless filed within 30 days of the date of service of summons or within the time provided by the Rules, the CPC or the Commercial Courts Act, as applicable. Therefore, the time prescribed by the CPC, wherever applicable, is made expressly applicable to the filing of the written statement.

24. Rule 4 of the Rules, though in the opening part thereof states that the Court may extend the time for filing the written statement by a further period not exceeding 90 days, ‘but not thereafter,’ further goes on to state that in case, no written statement is filed within the extended time also, the Registrar ‘may’ pass orders for closing the right to file the written statement. It is settled principle of law that the word ‘may’ is not a word of compulsion; it is an enabling word and implies discretion unless it is coupled with a duty or the circumstances of its use otherwise warrants. The use of word ‘may’ in Rule 4 is to confer a discretion in the Registrar in a given case not to close the right of the defendant to file the written statement even though the same has not been filed within the extended time. The discretion that was left in the Court under Order VIII Rule 1 read with Order VIII Rule 10 of the CPC as applicable to non-commercial suits, has been continued by the Rules.

25. It is to be kept in mind that the High Court of Delhi, at the time of notifying the Rules in 2018, had the benefit of the CPC as applicable to non-commercial suits as also the special provisions applicable to Commercial Suits under the Commercial Courts Act, 2015. The High Court would have been well aware of the interpretation placed by the Courts on these provisions, laying special emphasis on the words used therein. The High Court did not choose the language of the Commercial Courts Act. This shows the intent of the High Court, in its Rule making power, not to foreclose the discretion vested in the Court/Registrar to condone the delay even beyond 120 days of the service of summons if sufficient cause is shown for such non-filing. It is settled law that use of same language in a later statute as was used in an earlier one in pari materia is suggestive of the intention of the legislature that the language so used in the later statute is used in the same sense as in the earlier one, and change of language in a later statute in pari materia is suggestive that change of interpretation is intended.

26. Applying the above principle, it must be held that the High Court, not having adopted the language of the Commercial Courts Act, but of the CPC as applicable to non-commercial suits, did not intend the Court to be completely denuded of its power to condone the delay in filing of the written statement beyond 120 days of the service of the summons.

27. Of course, in considering the delay beyond 120 days, the court will adopt an even more harsh and strict yardstick in determining the sufficiency of cause shown, as has been held in Kailash (supra).

28. In Ram Sarup Lugani (supra), a Division Bench of this Court was considering Rule 5 of Chapter VII of the Rules, which read as under:- “CHAPTER VII

5. Replication.-The replication, if any, shall be filed within 30 days of receipt of the written statement. If the Court is satisfied that the plaintiff was prevented by sufficient cause for exceptional and unavoidable reasons in filing the replication within 30 days, it may extend the time for filing the same by a further period not exceeding 15 days but not thereafter. For such extension, the plaintiff shall be burdened with costs, as deemed appropriate. The replication shall not be taken on record, unless such costs have been paid/ deposited. In case no replication is filed within the extended time also, the Registrar shall forthwith place the matter for appropriate orders before the Court. An advance copy of the replication together with legible copies of all documents in possession and power of plaintiff, that it seeks to file along with the replication, shall be served on the defendant and the replication together with the said documents shall not be accepted unless it contains an endorsement of service signed by the defendant/ his Advocate.” (Emphasis supplied)

29. The Division Bench laying emphasis on the words ‘but not thereafter’, held that the Court cannot extend the period for filing the replication beyond the outer limit of 45 days as mandated in the Rules, and upon expiry of the said period, the plaintiff’s right to file the replication would stand extinguished. However, it must be noticed that unlike Rule 4 of the Rules which states that ‘in case, no written statement is filed within the extended time also, the Registrar may pass orders for closing the right to file the written statement,’ no such discretion was vested in the Registrar or the Court by Rule 5 of the Rules. Rule 5, in fact, mandates the Registrar to forthwith place the matter for appropriate order before the Court. This difference in language used cannot also be said to be without any purpose. The judgment in Ram Sarup Lugani (supra), therefore, cannot govern the interpretation to be placed on Rule 4 of the Rules.

30. In Harjyot Singh (supra), the learned Single Judge of this Court, placing reliance on the Ram Sarup Lugani (supra), held that the Court does not have the power to condone a delay of beyond 90 days in filing of the written statement. However, in holding so, the learned Single Judge did not take notice of the difference between Rule 4 and Rule 5 of the Rules, as has been highlighted hereinabove. It also did not take note of the earlier judgment of the Division Bench of this Court in Esha Gupta (supra), which taking note of Rule 4 of the Rules and placing reliance on Desh Raj (supra), condoned the delay in filing of the written statement beyond the period of 120 days of service of summons.

31. In view of the above, it is held that though normally the learned in filing of the Written Statement beyond a period 120 days of the service of summons on the defendant, the learned Registrar/Court may, for exceptionally sufficient cause being shown by the defendant for not filing the written statement even within the extended time, grant further extension of time to the defendant to file the Written Statement. On such exceptionally sufficient cause been shown by the defendant, the Court is not powerless. It must exercise the discretion vested in it to ensure that procedural law does not trump over the endeavour to ensure that justice is done and the defendant is not condemned unheard. Again, even while exercising such discretion in favour of the defendant, the Court may adequately compensate the plaintiff and burden the defendant with exemplary costs so that injustice is not done to the plaintiff as well. The above cited test propounded by the Supreme Court in Kailash (supra) shall have to be kept in view by the Court while considering an application filed by the defendant seeking condonation of delay in filing of the written statement beyond 120 days of the receipt of the summons.

32. In the present case, the defendant has explained the reason for delay in filing of the written statement, stating as under:-

33. Though Mrs. Aditi Singh is neither a shareholder nor a Director in the defendant company, however, keeping in view that:- (a) the plaintiff has himself asserted in the plaint that short term loan amounts were advanced, inter-alia, to Mrs. Aditi Singh; (b) the plaintiff asserts in the plaint that the alleged oral Agreement to Sell was on assurance of inter-alia Mrs. Aditi Singh;

(c) the plaintiff asserts in the plaint that Mrs Aditi Singh is the mother of the four shareholders of the company, each having 25% share each in the defendant company.

(d) it is not denied that on complaints of Mrs. Aditi Singh, criminal investigations have been initiated and are pending; (e) what has been set up is an oral Agreement to Sell for which a huge consideration is claimed to have been paid; (f) the written statement was filed on the day when the application under Order VIII Rule 10 of the CPC filed by the plaintiff was first listed before this Court; and (g) the Written Statement already stands filed, albeit with a delay of 149 days in my opinion, the defendant has been able to make out an exceptionally sufficient cause for condoning the delay in filing of the written statement. The exercise of such discretion in favour of the defendant is, however, subject to payment of costs of Rs. 1 Lakh by the defendant to the plaintiff. Such costs shall be paid by the defendant to the plaintiff within two weeks of this order, failing which the Written Statement shall stand expunged from the record of the Suit.

34. In view of the above, I.A. 15442/2022 filed by the defendant is allowed subject to the above condition; and I.A. 13986/2022 filed by the plaintiff is disposed of in the above terms. CS(OS) 128/2022 & I.A.3550/2022

35. List on 10th February, 2023.

NAVIN CHAWLA, J. JANUARY 09, 2023/rv/Arya/DJ/AB