Summary
In a commercial suit, the defendant's written statement was rejected as filed beyond 120 days and its cross-examination of the plaintiff's witness was recorded as nil, leading to a decree. The Supreme Court held that the 120-day period fell wholly within the COVID-19 limitation exclusion ordered in the suo motu proceedings, so the written statement should have been taken on record, and that non-filing of a written statement does not take away the right to cross-examine; the decree against the appellant was set aside and the suit remanded.
Issues
- Whether the High Court was correct in holding that, because the defendant did not file a written statement, its right to cross-examine the plaintiff's witnesses was taken away.
- Whether the written statement filed beyond 120 days in a commercial suit should have been accepted in view of the exclusion of limitation ordered during the COVID-19 pandemic.
Provisions considered
- Order VIII Rule 1, proviso, Code of Civil Procedure, 1908 (as amended by the Commercial Courts Act, 2015)The Court noted that in commercial suits the proviso bars a written statement after 120 days from service of summons and that the period is mandatory, but held that here the period had to be read with the COVID-19 exclusion of limitation. (¶¶ 26, 27, 30)
- Section 9, General Clauses Act, 1897Applied to exclude the date of service of summons, so that the 120-day period ran from the day after service. (¶ 30)
- Article 142, Constitution of IndiaThe orders in Suo Motu Writ Petition (C) No. 3 of 2020, made under Article 142, excluded the period 15.03.2020 to 28.02.2022 for computing limitation in all judicial and quasi-judicial proceedings; the Court applied them to the time for filing the written statement. (¶¶ 28, 29, 30)
Held
- Procedural law is a handmaid of justice; where rigid adherence to technicalities causes injustice, courts should take a liberal approach so that a litigant has sufficient opportunity to defend. (¶¶ 2, 3)
- In a commercial suit the 120-day outer limit for filing a written statement under the proviso to Order VIII Rule 1 CPC, as amended, is mandatory and cannot ordinarily be condoned. (¶¶ 26, 27)
- Where the 120-day period, computed from the day after service of summons, began and ended within the period excluded for limitation by the Court's COVID-19 suo motu orders, that period must be excluded and the defendant permitted to file its written statement, as was done in earlier decisions of the Court. (¶¶ 28, 29, 30)
- Recording the defendant's cross-examination as nil only because it had not filed a written statement was perverse; a defendant who has not filed a written statement, even one proceeded against ex parte, retains the right to cross-examine the plaintiff's witnesses to test the plaintiff's case. (¶ 31)
Result
Appeal allowed; the High Court's judgment and the commercial court's decree, insofar as they concern the appellant (defendant No. 1), set aside; suit remanded to the trial court, which is to allow the written statement on payment of Rs. 1,00,000 costs, permit cross-examination of the plaintiff's witnesses, and decide the suit preferably within six months.