HEADNOTE
Rachit Katyal v. Suresh Kumar Taneja & Anr.
Court: High Court of Delhi
Bench: Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar
Date of Judgment: 11 December 2025
Citation: RFA (COMM) 466/2024
Laws / Sections Involved: Section 96 CPC; Order XLI CPC; Commercial Courts Act, 2015; Order VIII Rule 1 CPC
Keywords: Commercial tenancy dispute, striking off defence, non-filing of written statement, recovery of rent, appellate interference, Delhi High Court
Summary:
The Delhi High Court dismissed a commercial appeal filed by a tenant challenging a decree for recovery of rent arrears passed by the Commercial Court, holding that repeated procedural defaults cannot be dressed up as denial of fair opportunity. The Court upheld a decree directing payment of ₹5.51 lakh with interest to the landlords, noting that the tenant failed to file a written statement within the statutory timeline, resulting in striking off of defence, and thereafter repeatedly defaulted in participating meaningfully in trial. Rejecting the argument that a civil suit cannot be decreed merely due to non-filing of a written statement, the Court held that the plaintiffs had independently proved their claim through documentary and oral evidence, including the registered lease deed. The judgment reinforces strict procedural discipline in commercial litigation and limits appellate interference where parties abuse procedural indulgence.
Court’s decision
The Delhi High Court dismissed the commercial appeal and upheld the judgment and decree dated 18 May 2024 passed by the Commercial Court at Tis Hazari Courts. The Court held that no ground was made out for appellate interference under Section 96 read with Order XLI CPC. It affirmed the decree directing the appellant-tenant to pay ₹5,51,000 as outstanding rent along with simple interest at 6% per annum from the date of filing of the suit till realization, as well as costs. The Court concluded that the tenant had been afforded more than adequate opportunity at every stage and that his repeated defaults disentitled him from invoking principles of natural justice at the appellate stage.
Facts
The respondents-landlords had inducted the appellant as a tenant in the suit premises under a written lease agreement dated 31 May 2019. The lease stipulated a starting monthly rent of ₹50,000 for the first year, with a 20% enhancement for the second year and a further 10% escalation for the third year. The agreement also provided that in the event of default in payment of rent for two consecutive months, the lease would automatically stand terminated.
The tenant vacated the premises on 6 February 2022. Thereafter, on 25 April 2022, the landlords instituted a commercial suit seeking recovery of ₹5,51,000 towards arrears of rent. While the lease deed entitled the landlords to enhanced rent even for the second year, they specifically pleaded that they did not claim such enhancement owing to the COVID-19 pandemic, and restricted their claim to the agreed escalation for the third year.
Issues
The principal issues before the High Court were whether the Commercial Court erred in decreeing the suit when the tenant’s defence had been struck off for failure to file a written statement within the statutory period, and whether such a decree amounted to denial of a fair opportunity to contest the suit. The Court was also required to examine whether the landlords had independently proved their claim on merits, and whether the contractual escalation of rent had been correctly applied while computing the decretal amount.
Appellant’s arguments
The tenant contended that the Commercial Court had acted mechanically and decreed the suit merely because the written statement was not filed within the prescribed period. It was argued that even if the defence is struck off, the plaintiff must still strictly prove its case on merits. The appellant submitted that he was not afforded a real or effective opportunity to contest the evidence, particularly at the stage of cross-examination of the plaintiffs’ witness. It was also argued that the claim for escalated rent was unjustified and that the decree suffered from material irregularity warranting interference by the High Court.
Respondents’ arguments
The landlords opposed the appeal and supported the impugned decree. They pointed out that the tenant failed to file a written statement within the statutory maximum period of 120 days applicable to commercial suits, resulting in striking off of defence as mandated by law. It was submitted that despite this, the tenant was permitted to participate in the proceedings, cross-examine witnesses, and address arguments, but repeatedly defaulted in appearance. The respondents emphasised that the suit was decreed not on default alone, but on the basis of proved documentary and oral evidence, including the lease deed and testimony of multiple witnesses.
Analysis of the law
The High Court examined the scheme of the Commercial Courts Act, 2015 read with the amended provisions of the Code of Civil Procedure, particularly Order VIII Rule 1 CPC. It reiterated that in commercial suits, the timeline for filing a written statement is mandatory and non-extendable beyond 120 days, after which the defendant forfeits the right to file a defence. The Court clarified that striking off defence does not absolve the plaintiff from proving its case, but once the plaintiff discharges this burden through admissible evidence, the defendant cannot later complain of prejudice if he chose not to participate diligently.
The Court further emphasised that appellate jurisdiction under Section 96 CPC is not meant to reward procedural indiscipline or to reopen issues concluded on the basis of proved facts.
Precedent analysis
The Court’s reasoning is consistent with settled Supreme Court jurisprudence holding that timelines in commercial litigation are strict and intended to curb dilatory tactics. The Court implicitly followed the principles laid down in SCG Contracts India Pvt. Ltd. v. K.S. Chamankar Infrastructure Pvt. Ltd., where the Supreme Court held that courts have no discretion to extend time for filing written statements beyond the statutory limit in commercial suits. It also aligns with precedents holding that where a party repeatedly defaults despite indulgence, allegations of denial of natural justice are untenable.
Court’s reasoning
The Division Bench undertook a detailed examination of the procedural history and found that the tenant defaulted at every critical stage. First, he failed to file the written statement within the statutory and extended period, resulting in striking off of defence. Thereafter, when the plaintiffs’ witness appeared for cross-examination, the tenant either sought adjournments or remained unrepresented. Even after being granted a last opportunity subject to costs, the tenant again failed to appear, leading to closure of his right to cross-examine.
The Court observed that the record clearly demonstrated repeated indulgence by the trial court and persistent non-cooperation by the tenant. In such circumstances, the plea of lack of fair opportunity was described as wholly untenable.
On the merits of the decree, the Court held that the landlords had duly proved the lease deed and the agreed rent structure. It found no substance in the challenge to rent escalation, particularly since the landlords had voluntarily waived enhancement for the second year and claimed only what was contractually agreed for the third year. The Court concluded that the decree was based on evidence and not merely on procedural default.
Conclusion
The Delhi High Court concluded that no ground was made out to interfere with the judgment and decree passed by the Commercial Court. The appeal was dismissed along with all pending applications. The Court reaffirmed that litigants in commercial disputes must adhere to procedural discipline and cannot seek appellate sympathy after repeatedly abusing the process of law.
Implications
This judgment is a strong reaffirmation of the strict procedural regime governing commercial litigation. It underscores that the statutory timelines for filing written statements are mandatory and that repeated defaults can have decisive consequences. The ruling also clarifies that while plaintiffs must prove their case even where defence is struck off, defendants cannot later allege denial of natural justice when they consciously fail to participate despite multiple opportunities. The decision will deter dilatory tactics in commercial tenancy and recovery suits and strengthen the objective of expeditious adjudication under the Commercial Courts Act.
CASE LAW REFERENCES
• SCG Contracts India Pvt. Ltd. v. K.S. Chamankar Infrastructure Pvt. Ltd. – Mandatory timeline for filing written statement in commercial suits
• Oku Tech Pvt. Ltd. v. Sangeet Agarwal – Striking off defence for non-compliance with CPC timelines
• Right to fair trial jurisprudence – Natural justice cannot be invoked by habitual defaulters
FAQs
Q1. Can a commercial suit be decreed if the defendant does not file a written statement?
Yes. If the plaintiff proves its case through evidence, the suit can be decreed even after defence is struck off.
Q2. Is striking off defence mandatory in commercial suits?
Yes. After expiry of 120 days, courts have no discretion to permit filing of a written statement.
Q3. Will appellate courts interfere in such decrees?
Only if there is perversity or lack of evidence; procedural default alone is not a ground for interference.
