Defendants must file written statement within 120 days

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In a recent judgment, the Supreme Court considered whether a written statement can be filed by a defendant after 120 days, the maximum time period provided under the amended provisions of order VIII, rule 1 of the Code of Civil Procedure, 1908 (CPC). The Supreme Court observed that the proviso added to CPC by Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (act), is mandatory, and that a defendant will forfeit the right to file a written statement if it is not filed within 120 days from the date of the service of summons in the suit.

In the SCG Contracts India Pvt Ltd v KS Chamankar Infrastructure Pvt Ltd case, the Supreme Court appeal was filed against the judgment of Delhi High Court allowing a written statement filed by the defendants even though 120 days had elapsed from the date of service of summons.

In allowing the appeal, the Supreme Court observed that the added proviso to the CPC is mandatory. The following proviso was added to order VIII rule 1 to the CPC by the act and was made applicable to commercial disputes of a specified value with effect from 23 October 2015, the day on which the act came into force along with certain amendments to the CPC.

“Provided that where the defendant fails to file the written statement within the said period of 30 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 120 days from the date of service of summons, and on expiry of 120 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.”

It was re-emphasized by adding another proviso to order VIII rule 10: “Provided further that no court shall make an order to extend the time provided under rule 1 of this order for filing of the written statement.”

The Supreme Court concluded that a reading of these provisions would show that ordinarily, a written statement is to be filed within a period of 30 days. However, a grace period of 90 days is granted, the reasons for which the court must record in writing, and the payment of costs as it deems fit to allow such a written statement to be put on the record. What is of importance is the fact that beyond the 120 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.

This is further buttressed by the proviso in order VIII rule 10, adding that the court has no further power to extend the time beyond this period of 120 days. The appeal was thus allowed with the consequence that the written statement of defendant No. 1 was directed to be taken off the record.

The dispute digest is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.