Court’s Decision
The Calcutta High Court allowed the defendant’s application seeking extension of time to file a written statement in a commercial suit filed in 2016 despite a nine-year delay, observing that post-transfer to the Commercial Division, the plaint was amended, a Statement of Truth and documents were filed, but not served on the defendant. The Court held that to advance substantial justice, the defendant should be allowed to file the written statement upon payment of ₹50,000 as costs, with timelines fixed for service of pleadings and compliance.
Facts
The plaintiff filed the suit in 2016 seeking recovery, with part decree of ₹19 lakhs with interest granted on admission on 18 February 2016. No steps were taken by the plaintiff for the remaining claim until November 2024, when execution proceedings were initiated, and the suit was transferred to the Commercial Division on 4 December 2024. The plaintiff filed an amended plaint, Statement of Truth, and a list of documents but did not serve them on the defendant despite requests made on 6 December 2024. The defendant filed an application on 12 February 2025 seeking permission to file a written statement, arguing that transfer to the Commercial Division entitled it to a fresh 120-day period for filing the written statement.
Issues
- Whether transfer of a suit from the Regular Division to the Commercial Division entitles the defendant to a fresh 120-day period for filing the written statement under the Commercial Courts Act, 2015.
- Whether the defendant’s nine-year delay in filing the written statement could be condoned in the interests of justice considering non-service of amended pleadings.
- Whether the amended plaint and filing of a Statement of Truth required fresh service on the defendant to enable filing of a written statement.
Petitioner’s Arguments
The defendant argued:
- Post-transfer of the suit to the Commercial Division, a fresh period of 120 days should be available to file the written statement under the Commercial Courts Act.
- The amended plaint and Statement of Truth with documents filed by the plaintiff were not served despite requests, prejudicing the defendant’s right to file an effective written statement.
- Relying on Pestcon Engineering Industries Ltd. v. Jainco Projects (2025) and Raj Process Equipments v. Honest Derivatives (2022), the defendant contended that courts have allowed filing of written statements post-transfer to Commercial Division upon payment of costs in similar circumstances.
- The defendant was willing to contest the claim on merits, and no prejudice would be caused to the plaintiff if an opportunity was granted.
Respondent’s Arguments
The plaintiff argued:
- The suit was filed in 2016, and the defendant was served with the writ of summons on 21 March 2016 but failed to file a written statement for nine years without justification.
- There is no legal provision granting a fresh 120-day period post-transfer of a suit to the Commercial Division.
- Salem Advocate Bar Association v. Union of India (2005) clarified that while Order VIII Rule 1 CPC was directory earlier, under the amended provisions in commercial suits, the timeline is mandatory, and no written statement can be accepted beyond 120 days.
- The defendant had not shown any cause for the delay from 2016 to 2025 and should not be permitted to prolong litigation further.
Analysis of the Law
The Court examined:
- Section 15 of the Commercial Courts Act, 2015, and the proviso stating that post-transfer of a suit to the Commercial Division, the court may prescribe a new time period for filing a written statement.
- Pestcon Engineering Industries Ltd. v. Jainco Projects (2025) and Raj Process Equipments v. Honest Derivatives (2022), where written statements were allowed post-transfer upon payment of costs.
- Salem Advocate Bar Association (2005) on the directory nature of timelines under Order VIII Rule 1 CPC, contrasted with mandatory compliance in commercial suits unless court discretion is exercised under specific provisions.
- The principles that procedural rules serve the cause of justice and that if the plaintiff has not served amended pleadings post-transfer, an opportunity to file a written statement may be justified.
Precedent Analysis
- Pestcon Engineering Industries Ltd. (2025) – Allowed written statement post-transfer to Commercial Division subject to payment of costs.
- Raj Process Equipments (2022) – SC permitted filing of written statements post-transfer on facts indicating prejudice without default of the defendant.
- Salem Advocate Bar Association (2005) – Clarified procedural timelines are directory under CPC but stricter under Commercial Courts Act unless judicial discretion is invoked.
These cases supported the grant of an opportunity in commercial suits post-transfer in the interest of justice.
Court’s Reasoning
The Court found:
- No general rule grants an automatic 120-day fresh period post-transfer to the Commercial Division.
- However, Section 15 of the Commercial Courts Act permits the court to fix a timeline for filing the written statement post-transfer.
- The defendant had requested copies of the amended plaint and Statement of Truth, but the plaintiff failed to serve them, impacting the defendant’s right to defend effectively.
- Considering the plaintiff’s inaction between 2016 and 2024, and the non-service of documents post-transfer, the defendant should be granted an opportunity to file the written statement to advance justice.
- The opportunity was conditioned upon the payment of ₹50,000 as costs to balance equities.
Conclusion
- The High Court allowed the defendant to file a written statement within two weeks of receiving the amended plaint, Statement of Truth, and documents, which must be served by the plaintiff within one week, subject to the defendant paying ₹50,000 as costs within one week.
- Directed that if costs are not paid or timelines are not followed, the right to file the written statement will stand forfeited.
- Disposed of the application accordingly.
Implications
- Clarifies that post-transfer to Commercial Division, courts may grant time to file written statements under Section 15 Commercial Courts Act based on case facts.
- Reinforces that procedural justice prevails when non-service of amended pleadings impacts the defendant’s right to defend.
- Highlights that delays can be condoned upon costs to balance justice and compliance with commercial litigation timelines.
Short Note on Referred Cases
- Pestcon Engineering Industries Ltd. (2025) – Allowed WS post-transfer with costs.
- Raj Process Equipments (2022) – SC allowed WS post-transfer due to exceptional facts.
- Salem Advocate Bar Association (2005) – Clarified procedural timelines and court discretion.
These cases were crucial for the decision in balancing timelines with fairness in commercial litigation.
FAQs
- Can a defendant file a written statement in a commercial suit post-transfer after a long delay?
Yes, if the court exercises discretion under Section 15 of the Commercial Courts Act, especially if amended pleadings were not served.
- Does transfer to Commercial Division automatically grant a fresh 120-day period for filing a written statement?
No, there is no automatic fresh 120-day period, but courts can fix timelines under Section 15 Commercial Courts Act based on circumstances.
- What did the Calcutta High Court decide regarding delayed written statements in a commercial suit?
The Court allowed filing the written statement post-transfer upon payment of costs due to non-service of amended pleadings, balancing justice and procedure.