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The Supreme Court has clarified that the suo motu (at its own behest) limitation extension which was ordered due to the COVID-19 pandemic and the shutting down of courts does apply to the period prescribed for filing the written statement in commercial suits.

In effect, the top court has said that the limitation extension order(s) shall apply to the filing period prescribed vis-à-vis written statement in commercial suits.

"In other words, the orders passed by this Court on 23.03.2020, 06.05.2020, 10.07.2020, 27.04.2021 and 23.09.2021 in SMWP No. 3 of 2020 leave nothing to doubt that special and extraordinary measures were provided by this Court for advancing the cause of justice in the wake of challenges thrown by the pandemic; and their applicability cannot be denied in relation to the period prescribed for filing the written statement...", remarked a bench of Justices Dinesh Maheshwari and Vikram Nath.

An appeal was filed by Prakash Corporates against an order of the Chhattisgarh High Court which had upheld a decision of the trial court.

Following a payment-related dispute between Prakash and Dee Vee Projects, a suit was instituted on December 21, 2020.

When the commercial court took the case for consideration on June 22, 2021, the appellant sought an adjournment for filing the written statement on the submission that they were entitled to the extension in limitation to file it, even though the same went beyond 120 days as applicable, as per the Supreme Court suo motu order(s).

The limitation date for filing written statement expired on May 5, 2021 (as being the 120th day from date of service of summons in terms of the applicable provisions - this was not disputed).

The Trial Court declined Prakash’s (the defendant before it) application to file written statements on the ground that as per the proviso to Order VIII Rule 1 of the Code of Civil Procedure (CPC) (as substituted by the Commercial Courts Act, 2015) such a right of the defendant to file the written statement stood forfeited after 120 days from the summons being serviced.

A writ petition was filed under Article 227 before the Chattisgarh High Court against the above order. It was essentially submitted on behalf of the appellant that “the Court was closed on May 6, 2021 (when the 120 days expired) due to imposition of lockdown in pandemic control measures and on June 22, 2021, the application was filed before Trial Court seeking time for filing written statement on medical ground as the counsel for the appellant was in quarantine”.

It was further contended that from the period of limitation, the period between March 15, 2020 to March 14, 2021 would stand excluded in terms of the Supreme Court’s order, following which the limitation would not end on May 6, 2021.

The Chhattisgarh High Court upheld the trial courts decision in the impugned order wherein it took the view that “no Court could grant any extension of limitation against the provisions of the enactment under which the case is being considered and heard” and that the Supreme Court’s decision in its suo motu order(s) prescribing extension of limitation did not apply in the present case.

The division bench of the top court noted that on April 15, 2021, the Trial Court had specifically fixed the matter for arguments but it could not hear the parties and adjourned the matter to June 22, 2021 with reference to its own administrative order and the High Court’s administrative order dated April 5, 2021 which provided for truncated/curtailed functioning of subordinate Courts in view of the pandemic; and the directions had been of limited court functioning, even in terms of hours of working, essentially for the purpose of the cases of urgent nature.

The proceedings in the subject suit were neither of urgent nature nor were considered so by the Trial Court and it was for this reason that on April 15, 2021, the Trial Court simply adjourned the matter beyond two months, the bench further noted.

The top court also noted that on June 22, 2021, the appellants had submitted before trial court about the ailments of the partners of the appellant firm as also their lawyer and their families, where the lawyer lost his mother due to health complications and had thus asked for some time to file the written statements. To this the top court said,

"Any proposition, which suggests that during such non-regular-business days of the Trial Court, and rather bleak days for the humanity, the written statement ought to have been filed, could only be disapproved as being impractical and rather preposterous."

It was further held that assuming that while a suit could be filed beyond limitation but within 90 days from October 3, 2021, the period for filing written statement, if expired during that period, would operate against the defendant, was unrealistic and illogical.

The two-judge bench went on to reiterate that it is an unquestionable principle that the rules of procedure are essentially intended to subserve the cause of justice and are not for punishment of the parties in conduct of the proceedings.

"Of course, in the ordinary circumstances, the mandates of Rule 1(1) of Order V, Rule 1 of Order VIII as also Rule 10 of Order VIII, as applicable to the Commercial dispute of a Specified Value, do operate in the manner that after expiry of 120th day from the date of service of summons, the defendant forfeits the right to submit his written statement and the Court cannot allow the same to be taken on record but, these provisions are intended to provide the consequences in relation to a defendant who omits to perform his part in progress of the suit as envisaged by the rules of procedure and are not intended to override all other provisions of CPC like those of Section 10....", added the bench.

Noting that the written statement had already been prepared and notarised by the appellant, the Court ordered that they deserved to be taken on record and the Trial Court deserved to be directed to proceed with the matter in accordance with law thereafter.

With this view, the appeal came to be allowed.

Cause Title: PRAKASH CORPORATES v DEE VEE PROJECTS LIMITED