Commercial Suit Defendant Must Explain Delay Beyond 30 Days Even If Written Statement Is Filed Within 120 Days, Rules Delhi High Court.
Facts
The petitioners challenged orders of the Commercial Court refusing to condone the delay in filing their written statements under Order VIII Rule 1 CPC and striking off their defence.
The summons in the commercial suits had been served on 23 January 2024, while the written statements were filed only on 27 April 2024, resulting in a delay of 64 days beyond the initial 30-day period, though still within the statutory outer limit of 120 days applicable to commercial disputes.
The petitioners contended that they required additional time to collect books of accounts, invoices, GST records and other documents necessary for preparing comprehensive written statements. The Commercial Court rejected the explanation, declined to condone the delay, removed the written statements from the record and struck off the defence, leading to the present petitions before the Delhi High Court.
Issues
The Delhi High Court considered:
- Whether filing a written statement within the statutory outer limit of 120 days automatically entitles a defendant to have it taken on record.
- Whether the explanation offered by the petitioners constituted sufficient cause for condonation of delay beyond the initial 30-day period.
- Whether the Commercial Court committed any jurisdictional error in refusing to condone the delay and striking off the defence.
Petitioners’ Arguments
The petitioners argued that the disputes arose from commercial transactions requiring examination of numerous financial records, including books of accounts, invoices and GST documents.
According to them, the process of collecting and scrutinising these documents consumed considerable time, causing the delay.
They further submitted that the written statements had nevertheless been filed within the statutory outer limit of 120 days prescribed for commercial disputes and that the delay was neither intentional nor aimed at delaying the proceedings. Therefore, the Commercial Court ought to have exercised its discretion to condone the delay.
Respondent’s Arguments
The respondent contended that the petitioners had received legal demand notices as early as 22 March 2023, well before institution of the suits, and therefore had ample prior notice that litigation was imminent.
It was argued that the plea regarding collection of documents was entirely vague since the petitioners failed to identify the documents allegedly awaited, the persons from whom they had to be obtained, or the steps taken to procure them.
The respondent submitted that no satisfactory explanation covering the period of delay had been placed before the Commercial Court, and consequently no ground existed for exercising judicial discretion in favour of the petitioners.
Analysis of the Law
The High Court reiterated that in commercial suits, a defendant is ordinarily required to file the written statement within 30 days from service of summons.
Although the Court possesses discretion to extend the period up to 120 days, such extension is not automatic. The existence of the statutory outer limit merely preserves judicial discretion; it does not confer an unconditional right upon the defendant to file a delayed written statement.
The Court emphasised that a defendant seeking extension beyond the first 30 days must furnish a specific, satisfactory and convincing explanation demonstrating why compliance within the prescribed period was impossible. General assertions or vague reasons cannot justify exercise of the Court’s discretion.
Precedent Analysis
The Court relied upon the Division Bench judgment in Sunil Sahoo v. Anoop Kumar Jain, which held that extension of time beyond 30 days in commercial suits cannot be granted routinely merely because the written statement falls within the 120-day outer limit.
The Court also referred to the Supreme Court’s decision in Kailash v. Nankhu, reiterating that although timelines governing ordinary civil suits are directory, extension beyond the prescribed period remains exceptional and must be supported by compelling reasons beyond the control of the defendant. Courts are expected to enforce procedural discipline and grant extensions only where the interests of justice genuinely require it.
Court’s Reasoning
The High Court observed that the petitioners merely stated that additional time was required to collect books of accounts, invoices and GST records but failed to specify which documents were unavailable, from whom they were to be obtained, what efforts had been undertaken to procure them, or what circumstances prevented timely filing.
The Court also noted that the commercial transactions had concluded long before institution of the suits and that legal demand notices had been served approximately ten months before service of summons. Consequently, the petitioners had sufficient opportunity to organise their records before litigation commenced.
Further, the Court found the explanation particularly unconvincing because the defence itself was substantially based upon an alleged cash payment of approximately ₹4,25,000, rather than any complex accounting exercise requiring prolonged document collection.
Since the Commercial Court had carefully considered the explanation and found it vague and insufficient, the High Court held that no perversity, illegality or jurisdictional error existed warranting interference under its supervisory jurisdiction.
Conclusion
The Delhi High Court dismissed both petitions.
The Court held that merely filing a written statement within the 120-day outer limit under Order VIII Rule 1 CPC does not automatically entitle a defendant to condonation of delay. A satisfactory explanation for not filing the written statement within the initial 30-day period remains mandatory. As the petitioners failed to furnish any specific or convincing justification, the Commercial Court rightly refused to condone the delay and struck off their defence.
Case Details
Case: Sandeep Goel v. Jugal Kishor Toshniwal and Deepika Gupta v. Jugal Kishor Toshniwal
Court: High Court of Delhi
Case Numbers: CM(M) 2732 of 2024 & CM(M) 2739 of 2024
Judge: Justice Ajay Digpaul
Date: 29 July 2026
Result: Both petitions were dismissed. The Delhi High Court upheld the Commercial Court’s refusal to condone the delay in filing the written statements, reiterating that filing within the statutory outer limit of 120 days does not dispense with the requirement of showing sufficient cause for delay beyond the initial 30-day period.
