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2019 (2) TMI 1658

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..... he present case, a Suit was filed on 10.03.2017 claiming a sum of ₹ 6,94,63,114/-. The Defendant No.1 was served with the summons in the Suit on 14.07.2017. 120 days from this date takes us to 11.11.2017, by which date no written statement had been filed. Meanwhile, however, an Order VII Rule 11 application was filed. This application was taken up and rejected by the first impugned order dated 05.12.2017. After rejecting the Order VII Rule 11 application, the learned Single Judge recorded that none appeared for the plaintiff inspite of advance copy stated to have been given. He also records that the counsel for the defendant No.1 now states that seven days time be granted to file a written statement. Para 14 of the aforesaid order then reads as follows: 14. Subject to the defendant No.1 paying costs of ₹ 25,000/- to the counsel for the plaintiff on or before 15th December, 2017, the time for filing the written statement is extended till 15th December, 2017. If either of the conditions is not complied with, the right of the defendant No.1 to file written statement shall stand closed without any further order. 3) In obedience to this order, a w .....

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..... een filed and that had to be answered before trial of the Suit could commence, it was clear that a written statement could not be filed. He then relied upon Section 151 of the Code of Civil Procedure which preserves the inherent power of the court, more particularly, that of a Court of record - the High Court, and can be invoked in cases like the present where grossly unjust consequences would otherwise ensue. 7) Having heard learned counsel for both parties, it is important to first set out the statutory provisions. 8) The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 came into force on 23.10.2015 bringing in 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 late .....

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..... as no further power to extend the time beyond this period of 120 days. 9) In Bihar Rajya Bhumi Vikas Bank Samiti (supra), a question was raised as to whether Section 34(5) of the Arbitration and Conciliation Act, 1996, inserted by Amending Act 3 of 2016 is mandatory or directory. In para 11 of the said judgment, this Court referred to Kailash vs. Nanhku, (2005) 4 SCC 480 referring to the text of Order 8 Rule 1 as it stood pre the amendment made by the Commercial Courts Act. It also referred to the Salem Advocate Bar Association vs. Union of India, (2005) 6 SCC 344, which, like the Kailash judgment, held that the mere expression shall in Order 8 Rule 1 would not make the provision mandatory. This Court then went on to discuss in para 17 State vs. N.S. Gnaneswaran, (2013) 3 SCC 594 in which Section 154(2) of the Code of Criminal Procedure was held to be directory inasmuch as no consequence was provided if the Section was breached. In para 22 by way of contrast to Section 34, Section 29-A of the Arbitration Act was set out. This Court then noted in para 23 as under: 23. It will be seen from this provision that,unlike Sections 34(5) and (6), if an award is mad .....

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..... the respondents. Order VII Rule 11 proceedings are independent of the filing of a written statement once a suit has been filed. In fact, para 6 of that judgment records However, we may hasten to add that the liberty to file an application for rejection under Order 7 Rule 11 CPC cannot be made as a ruse for retrieving the lost opportunity to file the written statement . 15) Learned counsel appearing for the respondents then argued that it cannot be assumed that the learned Single Judge did not know about these amendments when he passed the first impugned order dated 05.12.2017. We do not wish to enter upon this speculative arena. He then argued that since this judgment permitted him to file the written statement beyond 120 days, it was an act of the Court which should prejudice no man. This doctrine cannot be used when the res is not yet judicata. The 05.12.2017 order is res sub judice inasmuch as its correctness has been challenged before us. 16) Learned counsel for the respondents then strongly relied upon the inherent powers of the Court to state that, in any case, a procedural provision such as contained in the amendment, which may lead to unjust cons .....

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