TMI Blog2018 (10) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... e limit for filing the written statement applicable to a Commercial Court is mandatory. Such an interpretation would also be in consonance with the scheme of the Act of 2015 and the objects for enactment of the said act. Petition dismissed. - R/SPECIAL CIVIL APPLICATION No. 11710 of 2018 - - - Dated:- 5-9-2018 - MR AKIL KURESHI AND MR B.N. KARIA, JJ. For The Petitioner : Mr Tejas Satta for Mr Anip A Gandhi, Advocates ORAL JUDGMENT ( PER : HONOURABLE Mr. JUSTICE AKIL KURESHI) Petitioner-Indian Overseas Bank [hereinafter to be referred to as, the petitioner Bank ] has challenged an order dated 2nd April 2018 passed by the learned Judge, Commercial Court, Ahmedabad below Exh. 16 in Commercial Civil Suit No. 152 of 2017. Facts leading to the said challenge are as under : The petitioner is a public sector Bank. The respondentsoriginal plaintiffs had availed credit facilities from the petitioner-Bank. According to the Bank, the borrowers committed default in making repayment, due to which the Bank had taken steps under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [ SARFESI Act for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defendant for condoning delay, and taking the written statement on record. The learned Judge referred to provisions of Order VIII CPC; as amended by the Act of 2015 and came to the conclusion that he has no power to extend the time, beyond the period of 120 days from the date of service of summons, to enable defendant to file the written statement. This order of the Commercial Court is challenged before us in the present petition. Learned advocate Shri Tejas Satta for the petitioner submitted that the suit is frivolous and vexatious, filed by the plaintiff in order to avoid the liability of repayment of Bank s dues. He submitted that the Bank had already initiated proceedings under the SARFESI Act and also taken symbolic possession of the secured assets at which stage, the suit came to be filed on wholly frivolous and vexatious grounds. Counsel further submitted that the provisions of CPC in relation to filing of the written statement and time for such purpose are procedural in nature and cannot defeat the substantive rights. He, therefore, submitted that such provision should be construed liberally and the time limit should be held to be directory in nature. Counsel further sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays to the opposite party for filing his version or reply and not beyond that. Reliance was also placed on a decision of the Supreme Court in case of Sejal Glass Limited v. Navilan Merchants Private Limited, AIR 2017 SC 4477 in which, the Supreme Court, while reversing the judgment of the Commercial Court; as confirmed by the High Court rejecting the suit under Order VII Rule 11 CPC, granted further time for filing the written statement. A short question that calls for consideration is - Does the Commercial Court have power to take on record, the written statement which is presented beyond the period of 120 days from the date of service of summons on sufficient grounds, preventing the defendant from filing the same being made out. Before any further debate, we must record that this issue is settled by a judgment of Division Bench of this Court in the case of Jayatma Informatics Pvt. Ltd v. HCL Infosystems Limited [Special Civil Application No. 13430 of 2017 :: Decided on 2nd November 2017]. It was a case in which the petitioner, who was defendant in a Commercial Civil Suit, had attempted to present the written statement beyond the period of 120 days from the date of service o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submitted beyond the period of 120 days from the date of service of the summons. As observed hereinabove, even learned counsel appearing on behalf of the petitioner has also fairly conceded and/or admitted that the learned Judge, Commercial Court by not taking on record the written statement which was submitted beyond the period of 120 days from the date of service of summons is justified in his action. 13.1 However, Shri Kamal Trivedi, learned counsel appearing on behalf of the petitioner has requested this Court to exercise powers under Article 226 to do substantial justice and in the facts and circumstances of the case when in the meantime, the defendant was trying to settle the dispute with the plaintiff and therefore did not file written statement in time and thereafter when the written statement was submitted, one hundred twenty days period has expired, and therefore, it is requested to exercise powers under Article 226 and to direct the learned Judge, Commercial Court to take on record the written statement and/or permit the petitioner herein-original defendant to place on record, the written statement. It is the case on behalf of the petitioner herein-original defen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of powers under Article 227 of the Constitution only which is different from Article 226 of the Constitution. 14. In view of the aforesaid facts and even the law laid down by the Hon'ble Supreme Court in the aforesaid two decisions, the submission on behalf of the petitioner to exercise power under Article 226 of the Constitution and to permit the petitioneroriginal defendant to place on record the written statement is not required to be accepted. 15. Now so far as submission on behalf of the petitioner and the request to exercise powers under Article 226 of the Constitution and to permit the petitioner-original defendant to place on record the written statement beyond the period of 120 days from the date of service of the summons to do substantial justice and the submission on behalf of the petitioner that as held by the Hon'ble Supreme Court in the case of Kailash v. Nanhku Ors. [Supra] and in the case of Salem Advocate Bar Association, T.N v. Union of India [Supra], the time limit provided in CPC is directory is concerned, at the outset, it is required to be noted that the decisions of the Hon'ble Supreme Court in the case of Kailash v. Nanhku Ors.[Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of service of summons. No such provision fell for consideration before the Apex Court in the aforesaid two decisions. Therefore, considering the aforesaid provisions as such, the Commercial Court is prohibited from taking written statement on record, if it is submitted beyond the period of 120 days. Looking to the object and purpose of enactment of the Commercial Courts, Commercial Division Commercial Appellate Division of High Courts Act, 2015 and the special provisions/ mechanism for disposal of the commercial disputes, even granting of 120 days cannot be said to be unreasonable. In other words, not permitting the defendant to file written statement, if submitted beyond the period of 120 days from the date of submission of the summons cannot be said to be unreasonable. The object and purpose to provide such a time limit is required to be considered while considering the object and purpose of enactment of the Commercial Courts Act, 2015 which is enacted for speedy disposal of the commercial disputes and which provides for special mechanism for speedy disposal of the commercial disputes. Under the circumstances, the aforesaid decisions taking the view that time limit provided un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act envisages that the commercial disputes of specified value shall be dealt with by the Commercial Courts. Appeals against the judgment of the Commercial Court would lie before the High Court Appellate Commercial Division. Section 8 of the Act of 2015 provides for a bar against revision application or petition against an interlocutory order. It provides that notwithstanding anything contained in any law for the time being in force, no civil revision application or petition shall be entertained against any interlocutory order of a Commercial Court, including an order on the issue of jurisdiction and any such challenge; subject to the provisions of Section 13, shall be raised only in an appeal against a decree of the Commercial Court. Section 16 of the Act of 2015 provides for amendment to the CPC in its application to commercial disputes and reads as under :- 16. Amendments to the Code of Civil Procedure, 1908 in its application to commercial disputes [1] The provisions of the Code of Civil Procedure, 1908 [5 of 1908] shall, in their application to any suit in respect of a commercial dispute of a Specified Value, stand amended in the manner as specified in the Schedul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. As per clause 4 [D] (i) of the Schedule to the Act of 2015, proviso to Rule 1 of Order VIII CPC would be substituted as under : 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. Order X Rule 8 of CPC pertains to procedure when party fails to present written statement, and reads ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime permitted or fixed by the Court; as the case may be, the Court shall pronounce the judgment against him or make such order in relation to the suit, as it thinks fit. The Court was of the opinion that by virtue of the said proviso, on failure of the defendant to file written statement, the Civil Court had been given discretion either to pronounce the judgment against the defendant or make such order in relation to the suit, as it thinks fit. Therefore, in the context of the proviso, despite use of the word shall , the Court has been given discretion either to pronounce or not to pronounce the judgment against the defendant, even if the written statement is not filed and instead pass such an order; as it thinks fit, in relation to the suit. Consequently, the time limit envisaged in Rule 1 of Order VIII CPC for filing the written statement was held to be directory and not mandatory in nature. The Court concluded this issue as under : 21. In construing this provision, support can also be had from Order 8 Rule 10 which provides that 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Civil Court under Rule 10 of Order VIII CPC. In the present case, however, we are concerned with entirely different scheme of statutory provisions. Significantly, the legislature was conscious of decision of the Supreme Court in case of Salem Advocate Bar Association [Supra] and interpretative process adopted therein. In the context of time limit for filing written statement under schedule to the Act of 2015, the legislature has therefore made two significant amendments in the CPC. Firstly, the proviso to Rule 1 of Order VIII is substituted. In the substituted form, this proviso provides that where the defendant fails to file the written statement within a period of thirty days, he would be allowed to file the written statement on such other day as may be specified by the court, for the reasons to be recorded in writing and on payment of such cost as the Court deems fit, but which shall not be later than 120 days from the date of service of summons. The proviso further provides that on expiry of 120 days from the date of service of summons, the defendant shall forfeit their right to file written statement and the court shall not allow the written statement to be taken on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute must be read in its plain grammatical manner and be applied accordingly. In the case of Afcons Infrastructure Limited v/s. Cherian Varkey Construction Company Private Ltd., reported in 2010 (8) SCC 24, it was observed that the principles of statutory interpretation are well settled. Where the words of the statute are clear and unambiguous, the provision must be given its plain and normal meaning, without adding or rejecting any words. Departure from this literal rule, by making structural changes or substituting words in a clear statutory provision, under the guise of interpretation would pose a great risk, as the changes may not be what the legislature intended or desired. It was further observed that an exception to the general rule is where the words used in the statutory provision are vague and ambiguous or where the plain and normal meaning of the words or grammatical construction thereof would lead to confusion, absurdity, repugnancy with other provisions, the Courts may use the interpretative tools to set right the situation. In the present case, we find the words used in the statute have no ambiguity or possibility of even two interpretations. We are conscious tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... touched and was consequently kept open. This act of granting the defendants time of eight weeks for filing the written statement, can thus be seen as the Court s exercising power under Article 141 of the Constitution. The contention of counsel for the petitioner that till the petitioner s application for rejection of plaint under Rule 11 of Order VII CPC is decided, the petitioner is not obliged to file the written statement, needs some comments. If the petitioner had filed such an application within 120 days of service of the summons, we would have further examined the petitioner s contention that as long as such application for rejection of plaint was pending, it was not necessary for the defendant to file the written statement and in a given case, a defendant may also take a stand that he was not obliged to present his full defence, till such application was decided by the Court. However, in the present case, the defendant-petitioner Bank before us presented application for rejection of the plaint under Order VII Rule 11 CPC simultaneously with an application for filing the written statement belatedly. Both these events thus took place after the maximum time permissible for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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