Court rules out extensions for filing written statement

By Vivek Vashi and Shaheda Madraswala, Bharucha & Partners
0
2003

Delhi High Court in the cases of Gulf DTH FZ LLC v Dish TV India Ltd & Ors and Oku Tech Private Limited v Sangeet Agarwal & Ors has emphasized the legislature’s intent to curb a party from prolonging the suit proceedings by holding that the courts do not have the power to arbitrarily and discretionally extend the time lines for filing a written statement as laid down by the provisions of order V rule 1 and order VIII rule 1 of the Code of Civil Procedure, 1908 (CPC), as amended by the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (Commercial Courts Act).

FACTS

In both these cases, the defendants had crossed the outer limit of 120 days to file their written statements. In view of this, the court had passed an order stating that the statutory period for filing a written statement had expired as per the provisions of the CPC as amended by the Commercial Courts Act. In the first case, the defendant filed an application asking the court to recall the order disallowing it to file its written statement and in the second, an application for condonation of delay was filed by the defendant.

JUDGMENTS

In the Gulf DTH case, Delhi High Court disregarded the defendant’s contentions that the suit had been filed before the notification of the Commercial Courts Act and that the suit was not renumbered as a commercial suit, and further that the defendant had filed an application under order VII rules 10 and 11 of the CPC, pending which the written statement was not required to have been filed.

Vivek Vashi, Mainstay of the litigation team, Bharucha_&_Partners
Vivek Vashi
Mainstay of the litigation team
Bharucha_&_Partners

The high court held that the suit was filed on 6 November 2015 and came up for hearing on 16 November 2015. The Commercial Courts Act came into effect on 23 October 2015 so any suit filed after that which answers the description of a commercial dispute under section 2(1)(c) of the act would be a commercial suit. Registering the suit as a commercial suit is a mere formality and administrative in nature and would not affect the suit being treated as a commercial one.

The court rejected the defendant’s contention that pending an application under order VII rules 10 and 11 no written statement is required to be filed, and held that the remedy under order VII rule 11 is an independent one which does not have to await the filing of the written statement.

Further, it was clarified that the defendant does not have the liberty to presume that there is an automatic extension up to 120 days to file its written statement. A defendant is required to file its written statement within 30 days. The court has the discretion, upon an application filed by the defendant, to extend this period up to 120 days and no further.

Shaheda Madraswala, Associate, Bharucha & Partners
Shaheda Madraswala
Associate
Bharucha_&_Partners

In view of the above, the court held that the defendant had lost its right to file a written statement.

In the Oku Tech case, in circumstances similar to those in the Gulf DTH case, the court held that the insertion of the substituted provisos to the CPC gave a clear indication regarding the legislative intent to bar courts from having the discretion to grant any extension beyond the time limit stipulated under the statute. The court stated that the mandate of law had to be strictly followed and any deviation would be beyond the purview of the court.

CONCLUSION

The legislature’s intent to curb prolonged litigation is clear and the judiciary is doing its best to carry this intent further. India is infamous for having an overburdened judicial system, which leads to indefinite delays in the disposal of cases. Inefficiencies in its legal infrastructure have made it more difficult for foreign as well as domestic investors to protect their investments in India. Therefore, an effective and expeditious judicial system is the need of the hour.

Delhi High Court’s decision not to allow a defendant to file its written statement beyond a period of 120 days is a stepping stone in reducing the time frame within which a proceeding can be disposed of. If the judiciary maintains this enthusiasm for strict time lines, it would portend a promising future for an efficient judicial system.

Vivek Vashi is the mainstay of the litigation team at Bharucha & Partners, where Shaheda Madraswala is an associate.

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