Supreme Court Judgment on Written Statement- SCG Contracts India Pvt. Ltd. against K.S. Chamankar Infrastructure Pvt. Ltd. & Ors
Supreme Court Judgment on Written Statement- SCG Contracts India Pvt. Ltd. against K.S. Chamankar Infrastructure Pvt. Ltd. & Ors

  Supreme Court Judgment on Written Statement – SCG Contracts India Pvt. Ltd. against K.S. Chamankar Infrastructure Pvt. Ltd. & Ors 

 

 

Is a written statement by a respondent acceptable when it is filed after the lapse of time of 120 days?

In a Civil Appeal filed by M/s SCG Contracts India Pvt. Ltd. against K.S. Chamankar Infrastructure Pvt. Ltd. & Ors. [Civil Appeal No. 1638 Of 2019] before the Hon’ble High Court of Delhi, an issue of forfeiture of the right of the defendant to file a Written Complaint, on the lapse of a period of 120 days arose. The period of 120 days is supposedly counted from the day the summon is issued from the Hon’ble Court.

Facts of the Case:

  • PETITIONER: M/s SCG Contracts India Pvt. Ltd is a decade-old construction company. This Pvt. Ltd. Company is based in Delhi, India, and deals in the infrastructure industry. (Hereinafter referred to as Petitioner or ‘SCG’)
  • RESPONDENT: K.S. Chamankar Infrastructure Pvt. Ltd & others. K.S. Chamankar Pvt. Ltd. is an infrastructure firm based in Mumbai, India. (Hereinafter referred to as Respondent or ‘KS Chamankar’)
  • Jurisdiction: Hon’ble High Court of Delhi; subsequently, Hon’ble Supreme Court of India.
  • A commercial suit was filed by the petitioner against the respondent on March 10, 2017.
  • Subsequently, the Hon’ble High Court issued a summon upon the respondent in line with the petition filed, on July 14, 2017.
  • The respondent’s written statement was filed on December 15, 2017.
  • The above-written statement from the respondent was accepted by the Court, even though a period of 120 days had already elapsed from the date of issue of summons (July 14).

 

Case Timeline-

DATE ACTION
March 10, 2017 The suit filed by SCG against KS Chamankar
July 14, 2017 Summon issued by Court upon Respondent
November 11, 2017

(120 days after July 14, 2017)

Date by which respondent was statutorily bound to file written statement
December 15, 2017 Date on which written statement was filed by respondent

 

What is a written statement?

A Written Statement is the official statement filed by a respondent in his/her defense. It is written to plead defense in front of the court concerned. The allegations so put up by the claimant are given a formal reply to by way of this statement. Detailed justification is given against every claim/accusation made in the plaint filed through the written statement. The respondent has the option to either admit or deny the charges put up against them by mentioning the same in their formal statement to the Court. Additionally, it is also provided that the respondent can attach a counter-claim against the claimant with counter-charges against the opposing party U/O 8 Rule 6 and 6a of the Civil Procedure Code, 1908 ( hereinafter abbreviated as CPC). This counter-claim has to be a part of the original written statement and cannot be sent after the written statement has already been filed.

In a case where the written statement has already been filed and the respondent still wishes to file a counter-claim on recently-discovered facts, it would not be permitted, unless it is an “additional written statement”.

 

Laws Applicable-

Order 8 of the CPC lists the 10 essential rules to be adhered to when dealing with written statements. These rules list out the procedures to be followed with respect to admittance/denial of a claim, counter-claim, specific denial and the time limits prescribed to take action. In the case in question of SCG and KS Chamankar, Rule 1 and Rule 10 are applicable as they deal with the allowable time duration for filing of the respondent’s written statement.

 

  • Rule 1.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 day, 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
    .”

 

In other words, a period of 30 days is the original statutorily allowable limit for a respondent to file their written statement. This further can be extended to the maximum of 90 more days. That makes it total 120 days at the maximum from the date of issue of summon, for the respondent to file their claim and/or counter-claim.

 

  • Rule 10.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 is relating to the suit as it thinks fit and on the pronouncement of such judgment a decree shall be drawn up.”

 

In other words, if the respondent (party who is supposed to file a written statement in accordance with rules 1 to 9 of the Order 8 of CPC, 1908) fails to file the statement in the time duration statutorily allowed to him, the Court is free to give a judgement against him, or any order that it deems fit.

 

Additional facts of the case:

  • An application was filed by the petitioner to strike off the written statement that had been filed by the respondent later than the allowable time limit provided to them U/O 8 Rule 1. The statement was filed on December 15, 2017, when it should have been ideally filed before November 11, 2017.
  • However, the High Court of Delhi did not consider this application and instead accepted the written statement filed by the respondent, which was beyond their allowable time window under Rule 1 of Order 8, CPC 1908. Thus, this was the disregard of Rule 10 of Order 8, which urges the concerned Court to take suitable action if the respondent fails to file his statement after the elapse of 120 days.
  • Following this, the petitioner was not satisfied with the decision taken by the High Court and subsequently filed an SLP (Special Leave Petition) in the Hon’ble Supreme Court of India, claiming relief and pleading to striking off of the written statement filed beyond the allowable limit of days.

 

Amendment to Rule 10 of Order 8, Civil Procedure Code

Before this amendment came into force under the Commercial Courts Act, 2015, there was no line of differentiation between other suits and commercial suits. They were more or less considered the same, from the procedural point of view. This fact rendered applicability of provisions of Civil Procedure Code, 1908 to commercial and other suits alike. This also implied that the court had the discretion to grant acceptance to any written statement received from the end of the respondent even after the elapse of the prescribed time limit of 120 days from the Date of Issue of the summon.

 

However, when the amendment came into force, a clear demarcation was drawn between other suits and commercial suits and the responding time of the respondent was strictly fixed to 120 days and no longer than that.

 

JUDGMENTS DELIVERED IN THE CASE-

The following judgments were passed by the Hon’ble Supreme Court after considering the facts and figures of the petition filed by SCG in light of the applicable rules:-

  1. Written Statements within 120 days of issuance of summons is mandatory.

Any statement that is received as official Written Statement from the respondent’s side, after the lapse of 120 days from the date of serving the summon shall be dismissed and not be treated as valid. Such written statements will not be considered as mentioned clearly in Rule 1 of Order 8, CPC. No such statement shall be entertained and the court reserves the right to pass its judgment as it deems fit, without consideration of the statement received late. In other words, The Supreme Court’s judgement rendered the late-filed written statements by any respondent as good as non-existential.

 

  1. The pending Order VII (Rule 11) application submitted by the Respondent does not hold as a valid reason for the delay in filing the written statement.

The respondent attempted to justify the delay in filing the written statement as the result of the pending order in response of the respondent’s application filed for the rejection of the plaint. For this contention, the Court held that both of these applications are independent of each other and delay in one cannot decide the fate of the other. In other words, the Court maintained that even though the Court’s order in response to the respondent’s application for rejection of the plaint was pending, the respondent was still legally bound to file the written statement in response to the petition filed originally against them, that too, within the specified time limit of 120 days. The respondent cited R K Roja v U S Rayudu & Ors ,[ (2016) 14 SCC 275] to back their claim but this was brushed aside by the Court.

 

  1. A court cannot abuse its inherent powers to circumvent or let go of the consequences arising from a procedural provision

The Supreme Court held that if or when there are specialized procedures listed to be observed while dealing with cases, they are mandatory to follow. Any court cannot exercise, or rather, abuse its inherent powers just to avoid the consequences that may arise from them. In this case, High Court of Delhi had chosen to accept the Written Statement filed by the respondent, which was already late. In turn, they did not even pass a judgment against them, which clearly led to them disregarding Rule 10 of Order 8 of CPC, 1908. Order 8 is solely concerned with the procedures surrounding written statements from the respondents and any court is not allowed to overlook the law, just because it results in doing away with the necessary provision.

 

Conclusion-

By way of the judgments delivered in this case, Hon’ble Supreme Court clearly reflected on the position of the law above the courts, in the case of commercial suits, with regards to filing of written statements. After the amendment made to Rule 10 of Order 8 of the CPC, 1908, it was observed that benches were not giving the amendment its due credit and resorted to conveniently ignore the amendment, which put the respondent in an advantageous position, since their Written Statement was accepted by the High Court of Delhi, despite being statutorily late. The Supreme Court held that this event amounts to unfair use of the inherent power of the court, which is not acceptable.

It was further clarified that transparency be maintained and procedural rules governing the operation and time-bound limit must be strictly observed.

 

 

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