Desh Raj v. Balkishan, 2020 SCC Online SC 49 (Decided on 20 January 2020)
The Respondent had filed a civil suit against the Appellant seeking specific performance of an agreement to sell and permanent injunction against alienation of the property to a third party. The Civil Court, after giving numerous opportunities to Appellant, closed its right to file the written statement under Order VIII Rule 1 of the Code of Civil Procedure, 1908 (“CPC”) and struck-off his defence owing to repeated delays and non-adherence of prescribed deadlines. Aggrieved by the order passed by the Civil Court, Appellant filed a Revision Petition before the High Court of Delhi which was also dismissed following the decision of its co-ordinate Bench in Oku Tech Pvt Ltd v. Sangeet Agarwal & Ors., 2016 SCC Online Del 6601 wherein it was held that there are no discretion with Courts to extend the time for filing the written statement beyond 120 days after service of summons. Therefore, Appellant filed an appeal before the Supreme Court challenging the High Court order.
Whether the mandatory time line prescribed for filing a written statement as per amended CPC under Order VIII, Rule 1, is applicable to non-commercial disputes?
Section 16 of the Commercial Courts Act, 2015 has amended the CPC in its application to commercial disputes. After coming into force of the said Act, there are two regimes of civil procedure, i.e., commercial disputes (as per Section 2(c) of the said Act) are governed by the amended version of CPC, whereas non-commercial disputes are governed by the unamended provisions of CPC.
The Court clarified that the mandatory time-line for filing written statement is not applicable to non-commercial suits. It held that the High Court overlooked the nature of the dispute and mistakenly applied the ratio of Oku Tech (upheld in SCG Contracts India Pvt. Ltd. v. K.S. Chamankar (2019) 12 SCC 210) which was rendered in light of amended Order VIII, Rule 1 of CPC applicable only to commercial disputes. As regards non-commercial suits, the time-line for written statement is directory and not mandatory and the Courts have the discretion to condone delay in filing of the written statement. (See Atcom Technologies Ltd. v. Y.A. Chunawala & Co. (2018) 6 SCC 639.
Although the unamended Order VIII, Rule 1 of CPC is directory, the Court held that it does not bestow a free hand to the litigant or lawyer to file the written statement at their own sweet will. The legislative objective behind prescription of timelines under CPC must be given due weightage so that the disputes are resolved in a timebound manner. An extreme hardship or delay occurring due to factors beyond the control of the parties despite proactive diligence, may be just and equitable instance for condonation of delay.
In the given facts, the Court held that nothing prevented Appellant from filing the written statement within the prescribed time. He has, thus, failed to give any logical reason for the delay and is unable to satisfy due diligence on his part. Despite the best case for dismissal of appeal, the Court exercised its indulgence to permit the Appellant to file the written statement within a week subject to cost of Rs. 25,000/-.
The written statement has to be filed within a period of 30 days from service of summons which can further extend to another 90 days in case of commercial disputes under the Commercial Courts Act, 2015. The Court has made it amply clear that this mandatory time-line for filing a written statement as per amended CPC is not applicable to non-commercial suits. Though the Supreme Court exercised its discretion to allow filing of the written statement in present unique situation, but it was categorical that this cannot be used as a precedent.