Court’s Decision
The Bombay High Court allowed two writ petitions filed under Article 227 of the Constitution of India (supervisory jurisdiction of the High Court over subordinate courts and tribunals) and set aside the Commercial Court’s order by which the written statements of two defendants had been taken off the record.
The Court held that the written statements were filed within the outer limit of 120 days from the date of valid service of summons, and therefore the Commercial Court was not justified in striking them off.
The Court observed:
“Procedure is handmaid of justice.”
It further held:
“Procedure ought not to be allowed to score a march over the substantive justice…”
Accordingly, the High Court directed that the written statements filed by both defendants be taken on record and the commercial suit be proceeded with in accordance with law.
Facts
The dispute arose from a commercial suit filed by the plaintiff company for recovery of various amounts allegedly payable by the defendants towards statutory, utility and other charges.
The plaintiff claimed that one defendant had been granted a licence to use land and stockyard premises near Kalamboli, Navi Mumbai, and that another defendant was later inducted as a co-licensee.
In the commercial suit, summons were sought to be served upon the defendants. The plaintiff claimed that summons were served by registered post on different dates. However, the defendants disputed the dates of service and also contended that they were not served with complete copies of the plaint and documents.
Both defendants eventually filed their written statements on 16 December 2024. The plaintiff then filed applications before the Commercial Court seeking to take those written statements off the record on the ground that they were filed beyond the statutory timeline.
The Commercial Court allowed the plaintiff’s applications and directed that the written statements be taken off the record. The defendants challenged that order before the Bombay High Court.
Issues
- Whether the written statements filed in the commercial suit were beyond the outer limit of 120 days.
- Whether service of summons by registered post could be treated as valid when there was doubt as to whether the plaint and documents were served along with the summons.
- Whether the Commercial Court was justified in taking the written statements off the record.
- Whether procedural strictness under the Commercial Courts Act could be applied in a manner that deprives a party of its substantive right to defend, despite substantial compliance.
Petitioners’ Arguments
The defendants argued that the Commercial Court had committed a serious error in calculating the period of 120 days.
One defendant submitted that the Commercial Court itself had held that there was no cogent material to show service of summons on the earlier date claimed by the plaintiff. The Court had treated appearance before the Commercial Court on 29 August 2024 as the relevant date of service. Therefore, the written statement filed on 16 December 2024 was within 120 days.
The other defendant argued that although the plaintiff claimed service by registered post on 24 July 2024, the reliable service was through the Bailiff on 21 August 2024. It was also argued that the postal article weighed only 110 grams, which created doubt whether the plaint and voluminous documents were actually served along with the summons.
The defendants further submitted that they had sought time to file written statements, the Court had granted time, and thereafter the Presiding Officer was not available on successive dates. Therefore, the defendants should not be penalised for circumstances beyond their control.
Respondent’s Arguments
The plaintiff argued that commercial suits are governed by strict timelines and that after the expiry of 120 days, the right to file the written statement stands forfeited.
The plaintiff relied on Order V Rule 1 CPC (summons requiring the defendant to appear and file written statement within 30 days, with an outer limit of 120 days in commercial suits) and Order VIII Rule 1 CPC (time limit for filing written statement) to submit that the Commercial Court had no power to accept the written statements beyond the prescribed period.
The plaintiff also contended that once the defendants had appeared before the Court and had knowledge of the suit, they could not avoid the consequences of delay.
Analysis of the Law
The High Court examined the effect of amendments applicable to commercial suits under the Commercial Courts Act, 2015.
The Court noted that under Order V Rule 1 CPC (issuance of summons and timeline for written statement) and Order VIII Rule 1 CPC (filing of written statement within 30 days, extendable up to 120 days in commercial suits), the defendant must file the written statement within 30 days from service of summons.
However, in commercial suits, the Court may allow filing beyond 30 days, but not beyond 120 days from the date of service of summons. After 120 days, the right to file the written statement is forfeited, and the Court cannot take it on record.
The Court also referred to Order VIII Rule 10 CPC (consequence when a party fails to present written statement within the permitted time), which empowers the Court to pronounce judgment or pass appropriate orders when a written statement is not filed.
However, the Court clarified that the starting point for the 120-day period is the valid service of summons. Therefore, the Court must first determine when valid service actually took place.
Important Finding On Service Of Summons
The High Court held that service of summons must be meaningful and complete.
It observed that if a defendant is required to file a written statement within strict timelines, the defendant must receive not only the summons but also the plaint and documents.
The Court held:
“Service of summons, without a copy of the plaint and its accompaniments, would not constitute a valid service in the eye of law…”
This was particularly important because failure to file the written statement within 120 days results in forfeiture of the right to defend.
Precedent Analysis
1. SCG Contracts (India) Pvt. Ltd. v. K.S. Chamankar Infrastructure Pvt. Ltd.
The Supreme Court held that in commercial suits, courts have no power to extend time for filing written statement beyond 120 days.
The High Court accepted this principle but held that in the present case, the written statements were not beyond 120 days if the correct date of service was considered.
2. Nahar Enterprises v. Hyderabad Allwyn Ltd.
The Supreme Court held that when summons is issued calling upon the defendant to file a written statement, a copy of the plaint and documents must accompany the summons.
The High Court relied on this principle while considering whether service by registered post could be treated as valid when there was doubt about service of the plaint and documents.
3. Kailash v. Nankhu
The Supreme Court held that procedural rules relating to written statements in ordinary civil suits are generally directory and not mandatory. The High Court noted this principle while distinguishing the stricter regime applicable to commercial suits.
4. R.N. Jadi and Bros. v. Subhashchandra
The Supreme Court cautioned that delay in filing written statement cannot be condoned routinely or mechanically.
The High Court accepted that delay must be justified, but held that the peculiar facts of the case required a justice-oriented approach.
5. Anvita Auto Tech Works Pvt. Ltd. v. Aroush Motors
The Supreme Court held that procedural rules are meant to advance justice and not defeat it. The High Court relied on this principle and quoted:
“The object of the procedural rules is to advance the cause of justice and not to thwart it…”
6. M.S. Sanjay v. Indian Bank
The Supreme Court held that legal rules cannot be applied divorced from the factual realities of the case. The High Court relied on this principle to mould relief in favour of substantial justice.
Court’s Reasoning
The High Court found that the Commercial Court had wrongly concluded that the written statements were filed beyond 120 days.
For one defendant, the Commercial Court had itself treated 29 August 2024 as the date of service. Since the written statement was filed on 16 December 2024, it was within 120 days.
For the other defendant, the Bailiff’s report showed service on 21 August 2024. The claim of earlier service by registered post on 24 July 2024 was doubtful because there was no clear proof that the plaint and documents were served along with the summons. The Court specifically noted that the postal article weighed only 110 grams, which made it doubtful whether voluminous pleadings and documents were included.
The Court therefore held that if time was calculated from the valid date of service, the written statements were within the 120-day outer limit.
The Court also considered that the defendants had applied for extension of time, the Commercial Court had granted time, and thereafter the Presiding Officer was not available on successive dates.
The Court asked:
“Should the defendants be made to suffer the consequences?”
Answering this in favour of the defendants, the Court held that technicalities should not defeat the right of defence where the written statements were filed within the statutory outer limit.
Conclusion
The Bombay High Court allowed the writ petitions.
The common order dated 25 July 2025 passed by the Commercial Court was quashed and set aside.
The written statements filed by both defendants were directed to be taken on record.
The commercial suit was directed to proceed in accordance with law.
The Court made it clear that while timelines in commercial suits are strict, they must be applied after properly determining the date of valid service of summons.
RAW LAW Takeaway
In a commercial suit, the written statement must be filed within the strict outer limit of 120 days from valid service of summons. But valid service means proper service of summons along with the plaint and documents. If there is genuine doubt about service, or if the written statement is actually filed within 120 days from the correct date of service, the defendant’s right to defend cannot be defeated on technical grounds.