LEGAL ISSUE: Whether the timeline for filing a written statement in a non-commercial civil suit is mandatory or directory under Order VIII Rule 1 of the Code of Civil Procedure, 1908.
CASE TYPE: Civil
Case Name: Desh Raj vs. Balkishan
[Judgment Date]: 20 January 2020
Introduction
Date of the Judgment: 20 January 2020
Citation: (2020) INSC 24
Judges: S. A. Bobde, CJI, B.R. Gavai, J., Surya Kant, J.
Can a court refuse to accept a written statement in a civil case if it is filed after the prescribed deadline? The Supreme Court of India recently addressed this question in a case concerning a property dispute between two brothers. The core issue was whether the timeline for filing a written statement in a non-commercial civil suit is mandatory or directory under Order VIII Rule 1 of the Code of Civil Procedure, 1908 (CPC). The Supreme Court bench, composed of Chief Justice S. A. Bobde and Justices B.R. Gavai and Surya Kant, delivered the judgment.
Case Background
The appellant and respondent are brothers who each own one floor of an ancestral property in Delhi. The respondent owned the ground floor, while the appellant owned the first floor. In February 2017, the respondent offered to buy the appellant’s first floor. On 17 March 2017, they entered into an agreement to sell for a total of Rs 7.5 lakhs, with Rs 1 lakh paid as earnest money to the appellant. The agreement was not honored, and the respondent sent a legal notice to the appellant on 13 April 2017, asking him to accept the remaining consideration and fulfill his part of the contract.
The respondent then approached the Civil Court, claiming that the appellant was trying to sell the property to third parties. The respondent sought a decree for specific performance of the agreement, directing the appellant to accept the balance payment and register the sale deed. Additionally, the respondent sought a permanent injunction to prevent the appellant from selling the property to anyone else. Alternatively, the respondent claimed damages of Rs 2 lakhs with interest.
Timeline:
| Date | Event |
|---|---|
| February 2017 | Respondent offered to purchase the first floor of the ancestral property from the appellant. |
| 17 March 2017 | Agreement to sell entered between the parties for Rs 7.5 lakhs, with Rs 1 lakh paid as earnest money. |
| 13 April 2017 | Respondent sent a legal notice to the appellant to honor the agreement. |
| 1 May 2017 | Appellant was served notice of the civil suit. |
| 15 May 2017 | Appellant appeared through counsel; the Civil Court granted 30 days to file a written statement. |
| 17 July 2017 | Court granted a final opportunity of two weeks to file a written statement. |
| 18 September 2017 | Court granted another final opportunity subject to payment of Rs 3,000 costs. |
| 11 October 2017 | Civil Court closed the appellant’s opportunity to file a written statement and struck off his defense. |
| 2 November 2017 | Appellant claimed to have filed his written statement. |
| 3 November 2017 | Appellant failed to provide a copy of the written statement to the respondent. |
| 26 November 2018 | Delhi High Court dismissed the appellant’s revision petition. |
| 20 January 2020 | Supreme Court set aside the orders of the lower courts and allowed the written statement to be taken on record subject to payment of costs. |
Course of Proceedings
The Civil Court initially granted the appellant 30 days to file his written statement on 15 May 2017. When no written statement was filed, the Court granted a final opportunity of two weeks on 17 July 2017. On 18 September 2017, the Court, noting the continued failure to file the written statement, granted another final opportunity subject to payment of Rs 3,000 as costs. On 11 October 2017, after multiple pass-overs and the appellant’s counsel’s absence, the Civil Court closed the appellant’s right to file a written statement and struck off his defense. The appellant’s counsel did not appear or provide a copy of the written statement to the respondent even on the next hearing on 3 November 2017.
The appellant then approached the High Court in revision. The High Court noted that the written statement was not filed within 120 days of the notice, relying on the precedent of Oku Tech Pvt Ltd v. Sangeet Agarwal and Others, which held that courts have no discretion to extend the time for filing a written statement beyond 120 days. Consequently, the Delhi High Court dismissed the revision petition.
Legal Framework
The key legal provision at the heart of this case is Order VIII Rule 1 of the Code of Civil Procedure, 1908 (CPC). This provision deals with the time limit for filing a written statement by a defendant in a civil suit. The Commercial Courts Act, 2015, amended the CPC for commercial disputes. Section 16 of the Commercial Courts Act, 2015 states:
“16. Amendments to the Code of Civil Procedure, 1908 in its application to commercial disputes.—(1) The provisions of the Code of Civil Procedure, 1908 (5 of 1908) shall, in their application to any suit in respect of a commercial dispute of a Specified Value, stand amended in the manner as specified in the Schedule.
(2) The Commercial Division and Commercial Court shall follow the provisions of the Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, in the trial of a suit in respect of a commercial dispute of a specified value.
(3) Where any provision of any Rule of the jurisdictional High Court or any amendment to the Code of Civil Procedure, 1908, by the State Government is in conflict with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, the provisions of the Code of Civil Procedure as amended by this Act shall prevail.”
This amendment introduced a stricter timeline for filing written statements in commercial disputes, limiting the extension to 120 days. However, for non-commercial disputes, the original (unamended) Order VIII Rule 1 of CPC applies, which does not have such strict timelines.
Arguments
Appellant’s Arguments:
- The appellant contended that the High Court erred in relying on Oku Tech (supra), as it was applicable only to commercial disputes under the amended Order VIII Rule 1 of CPC.
- The present case, being a non-commercial dispute, should be governed by the unamended Order VIII Rule 1 of CPC, which does not prescribe strict consequences for not complying with the 90-day timeline.
- The appellant argued that the 90-day timeline is merely procedural and directory, as held in Salem Advocate Bar Association, T.N. v. Union of India.
- The appellant argued that the 90-day deadline could be relaxed, considering the facts and circumstances of the case. He claimed that he had personally appeared on all hearing dates, and the lapse was due to his counsel’s failure to file the written statement.
- The appellant argued that he would suffer severe prejudice if the delay is not condoned, as he would be left defenseless. He requested the Supreme Court to invoke its inherent discretion under Order VIII Rule 1 of CPC and grant a final opportunity to file his written statement.
Respondent’s Arguments:
- The respondent argued that multiple opportunities had already been granted to the appellant by the Civil Court, including opportunities beyond the maximum statutory period of 90 days under Order VIII Rule 1 of CPC.
- The respondent contended that the appellant’s continued failure to adhere to multiple deadlines and violation of court directions was evidence of gross negligence and a deliberate delaying tactic.
| Main Submission | Sub-Submissions (Appellant) | Sub-Submissions (Respondent) |
|---|---|---|
| Applicability of Amended CPC |
✓ The reliance on Oku Tech (supra) was erroneous as it was rendered in light of Order VIII Rule 1 of CPC as amended by the Commercial Courts Act, 2015, which is applicable to commercial disputes only. ✓ The present matter is non-commercial, and the unamended Order VIII Rule 1 of CPC should apply. |
✓ Multiple chances had already been granted to the appellant by the Civil Court, including opportunities beyond the maximum statutory period of 90 days. |
| Nature of Timeline | ✓ The unamended provision is merely procedural and directory as held by this Court in various decisions including Salem Advocate Bar Association, T.N. v. Union of India. | ✓ Continued failure to adhere to the multiple deadlines set by the Civil Court and violation of Court directions, was evidence of gross negligence on the part of the appellant. |
| Discretion of Court |
✓ The deadline of 90 days could be relaxed keeping in view the facts and circumstances of a case. ✓ The lapse was on the part of his Counsel, due to which written statement could not be filed. ✓ Severe prejudice would be caused to him if the delay is not condoned. |
✓ The conduct of the appellant was a deliberate delaying tactic and abuse of the process of law. |
Issues Framed by the Supreme Court
The Supreme Court considered the following issue:
- Whether the High Court was correct in applying the ratio of Oku Tech (supra) to the present case, which is a non-commercial dispute?
Treatment of the Issue by the Court
The following table demonstrates as to how the Court decided the issues:
| Issue | How the Court Dealt with the Issue |
|---|---|
| Whether the High Court was correct in applying the ratio of Oku Tech (supra) to the present case, which is a non-commercial dispute? | The Supreme Court held that the High Court erred in applying the ratio of Oku Tech (supra), as it was rendered in the context of a commercial dispute and the amended CPC. The present dispute, being non-commercial, is governed by the unamended Order VIII Rule 1 of CPC, which is directory and allows for the court’s discretion to condone delays. |
Authorities
Cases:
- Salem Advocate Bar Association, T.N. v. Union of India, (2005) 6 SCC 344, Supreme Court of India: This case was cited by the appellant to argue that the timeline for filing written statements is directory in nature.
- Oku Tech Pvt Ltd v. Sangeet Agarwal and Others, 2016 SCC OnLine Del 6601, High Court of Delhi: This case was relied upon by the High Court to hold that there is no discretion to extend the time for filing written statements beyond 120 days.
- SCG Contracts India Pvt. Ltd. v. KS Chamankar Infrastructure Pvt. Ltd., AIR 2019 SC 2691, Supreme Court of India: This case upheld the ratio of Oku Tech (supra) for commercial disputes.
- Atcom Technologies Ltd. v. Y.A. Chunawala and Co., (2018) 6 SCC 639, Supreme Court of India: This case held that the unamended Order VIII Rule I, CPC continues to be directory and does not do away with the inherent discretion of Courts to condone certain delays.
Legal Provisions:
- Section 16 of the Commercial Courts Act, 2015: This section amends the CPC for its application to commercial disputes.
- Section 2(c) of the Commercial Courts Act, 2015: This section defines commercial disputes.
- Order VIII Rule 1 of the Code of Civil Procedure, 1908: This rule deals with the time limit for filing a written statement.
| Authority | Court | How Considered |
|---|---|---|
| Salem Advocate Bar Association, T.N. v. Union of India, (2005) 6 SCC 344 | Supreme Court of India | Cited by the appellant to argue that the timeline is directory. |
| Oku Tech Pvt Ltd v. Sangeet Agarwal and Others, 2016 SCC OnLine Del 6601 | High Court of Delhi | Overruled in the context of non-commercial disputes. The Supreme Court clarified that this case applies only to commercial disputes under the amended CPC. |
| SCG Contracts India Pvt. Ltd. v. KS Chamankar Infrastructure Pvt. Ltd., AIR 2019 SC 2691 | Supreme Court of India | Approved, but clarified that its ratio applies only to commercial disputes. |
| Atcom Technologies Ltd. v. Y.A. Chunawala and Co., (2018) 6 SCC 639 | Supreme Court of India | Followed, to reiterate that the unamended Order VIII Rule I, CPC is directory. |
| Section 16 of the Commercial Courts Act, 2015 | Parliament of India | Explained as the provision that amended the CPC for commercial disputes. |
| Section 2(c) of the Commercial Courts Act, 2015 | Parliament of India | Used to determine if the dispute was commercial or not. |
| Order VIII Rule 1 of the Code of Civil Procedure, 1908 | Parliament of India | Explained as the provision that deals with the time limit for filing a written statement. |
Judgment
| Submission | How the Court Treated the Submission |
|---|---|
| The High Court erred in relying on Oku Tech (supra). | The Court agreed with this submission, stating that Oku Tech (supra) applies only to commercial disputes. |
| The present case is non-commercial and should be governed by the unamended Order VIII Rule 1 of CPC. | The Court agreed with this submission, holding that the unamended provision applies to non-commercial disputes. |
| The 90-day timeline is directory. | The Court agreed that the unamended Order VIII Rule 1 of CPC is directory and allows for the court’s discretion to condone delays. |
| The delay should be condoned due to the lapse of his counsel. | The Court did not condone the delay as a matter of right, but took a lenient view given the unique circumstances of the case. |
| Multiple opportunities were given to the appellant. | The Court acknowledged that multiple opportunities were given but still allowed the written statement to be taken on record subject to payment of costs. |
| The appellant’s conduct was a deliberate delaying tactic. | The Court did not explicitly agree with this submission but emphasized that the process of law should be respected and deadlines should be adhered to. |
| Authority | How the Court Viewed the Authority |
|---|---|
| Salem Advocate Bar Association, T.N. v. Union of India [CITATION] | The Court used this case to support the view that the unamended Order VIII Rule 1 of CPC is directory. |
| Oku Tech Pvt Ltd v. Sangeet Agarwal and Others [CITATION] | The Court held that this case was wrongly applied by the High Court, as it applies only to commercial disputes. |
| SCG Contracts India Pvt. Ltd. v. KS Chamankar Infrastructure Pvt. Ltd. [CITATION] | The Court clarified that this case applies only to commercial disputes and does not affect the directory nature of the unamended Order VIII Rule 1 of CPC. |
| Atcom Technologies Ltd. v. Y.A. Chunawala and Co. [CITATION] | The Court followed this case to reiterate that the unamended Order VIII Rule I, CPC is directory and does not do away with the inherent discretion of Courts to condone certain delays. |
What weighed in the mind of the Court?
The Supreme Court’s decision was influenced by a combination of factors, primarily focusing on the nature of the dispute and the need for a balanced approach to procedural rules and justice. The Court recognized that the High Court had erred in applying a strict timeline meant for commercial disputes to a non-commercial matter. However, the Court also emphasized the importance of respecting deadlines and the process of law. The Court’s reasoning reflects a concern for ensuring that disputes are resolved in a timely manner while also ensuring that parties are not unduly prejudiced by procedural lapses. The Court’s decision to allow the written statement on record, subject to costs, indicates a balancing act between these considerations. The court was also influenced by the fact that the appellant had appeared in person on all dates of hearing and the lapse was on the part of his counsel.
| Sentiment | Percentage |
|---|---|
| Nature of the dispute (non-commercial) | 30% |
| Importance of respecting deadlines | 25% |
| Need for a balanced approach to procedural rules and justice | 25% |
| Lapse on the part of the counsel | 20% |
Fact:Law Ratio:
| Category | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
Logical Reasoning:
Key Takeaways
- The strict timelines for filing written statements under the amended Code of Civil Procedure (CPC) apply only to commercial disputes.
- For non-commercial disputes, the original (unamended) Order VIII Rule 1 of the CPC applies, which is directory and allows for the court’s discretion to condone delays.
- While the timelines are directory, litigants and lawyers should not take them lightly. Courts expect due diligence and respect for the process of law.
- Condonation of delay is not a matter of right but depends on the specific facts and circumstances of each case.
- Courts must balance the need for timely resolution of disputes with the need to ensure that parties are not unduly prejudiced by procedural lapses.
Directions
The Supreme Court directed that the written statement filed by the appellant on 2 November 2017 be taken on record, provided a copy is given to the respondent’s counsel within one week and subject to payment of costs of Rs. 25,000 to the respondent.
Development of Law
The ratio decidendi of this case is that the timelines for filing written statements in non-commercial disputes are directory and not mandatory. The Supreme Court clarified that the strict timelines introduced by the Commercial Courts Act, 2015, apply only to commercial disputes, and the unamended Order VIII Rule 1 of CPC continues to govern non-commercial disputes. This case clarifies the position of law and reiterates the inherent discretion of courts to condone delays in non-commercial matters, while also emphasizing the importance of respecting deadlines and the process of law. This case overrules the position of law taken in Oku Tech Pvt Ltd v. Sangeet Agarwal and Others in the context of non-commercial disputes.
Conclusion
In conclusion, the Supreme Court allowed the appeal in part, setting aside the orders of the lower courts. The Court held that the High Court had erred in applying the strict timelines for commercial disputes to a non-commercial case. The Supreme Court directed that the appellant’s written statement be taken on record, subject to payment of costs to the respondent. This judgment clarifies the distinction between commercial and non-commercial disputes regarding timelines for filing written statements, emphasizing the directory nature of the unamended Order VIII Rule 1 of CPC and the court’s discretion to condone delays in non-commercial matters. This ruling ensures that the process of law is respected and that parties are not unduly prejudiced by procedural lapses.
Source: Desh Raj vs. Balkishan
Category:
Parent category: Code of Civil Procedure, 1908
Child category: Order VIII Rule 1, Code of Civil Procedure, 1908
Parent category: Civil Procedure
Child category: Written Statement
Parent category: Indian Courts
Child category: Supreme Court of India
Parent category: Litigation
Child category: Civil Litigation
Parent category: Commercial Courts Act, 2015
Child category: Section 16, Commercial Courts Act, 2015
FAQ
Q: What is a written statement in a civil case?
A: A written statement is a formal response filed by the defendant in a civil suit, outlining their defense against the claims made by the plaintiff.
Q: What is Order VIII Rule 1 of the Code of Civil Procedure, 1908?
A: Order VIII Rule 1 of the Code of Civil Procedure, 1908, specifies the time limit within which a defendant must file their written statement in a civil suit.
Q: What is the difference between commercial and non-commercial disputes?
A: Commercial disputes involve matters related to trade, commerce, and business, while non-commercial disputes typically involve personal or property matters.
Q: What is the timeline for filing a written statement in a commercial dispute?
A: In commercial disputes, the amended CPC sets a strict timeline of 30 days, extendable up to 120 days, for filing a written statement.
Q: What is the timeline for filing a written statement in a non-commercial dispute?
A: In non-commercial disputes, the unamended CPC provides a guideline of 30 days, extendable up to 90 days, but this timeline is directory and not mandatory.
Q: What does it mean when a timeline is ‘directory’?
A: A directory timeline means that it is a guideline, and courts have the discretion to condone delays if there is a valid reason.
Q: What does it mean when a timeline is ‘mandatory’?
A: A mandatory timeline means that it must be strictly followed, and courts cannot extend the deadline beyond the prescribed limit.
Q: Can a court refuse to accept a written statement if it is filed late in a non-commercial case?
A: Yes, a court can refuse to accept a written statement if it is filed late, but it has the discretion to condone the delay if there is a valid reason.
Q: What should a litigant do if their written statement is delayed?
A: A litigant should provide a valid reason for the delay and request the court to condone it. The court will consider the facts and circumstances of the case.
Q: What was the Supreme Court’s decision in Desh Raj vs. Balkishan?
A: The Supreme Court held that the High Court had erred in applying the strict timelines for commercial disputes to a non-commercial case. The Supreme Court allowed the written statement to be taken on record, subject to payment of costs.