M. Maria Albert Stanly v. Diamond Hospital Equipments, Banadurgarh, Jhajjar
2023-12-22
P.D.AUDIKESAVALU, SANJAY V.GANGAPURWALA
body2023
DigiLaw.ai
ORDER : (P.D. Audikesavalu, J.) : The instant reference placed before this Division Bench of the Court raises the following questions of law for determination :- (i) Whether the outer time limit of 120 days for filing of Written Statement by a Defendant in a suit arising out of commercial dispute would also apply to filing of Written Statement by a Plaintiff in response to a Counter-Claim made by a Defendant in such suit? (ii) If so, what would be the date from which the said period would have to be reckoned for filing of Written Statement by a Plaintiff to a Counter-Claim made by a Defendant? 2. A Learned Judge of this Court in M/s.CSCO LLC -vs- M/s.Lakshmi Saraswathi Spintex Limited (Order dated 28.01.2022 in A. No. 4791 of 2021 in C.S. No. 697 of 2017), who examined the said controversy, held as follows:- “22. In the considered view of this Court, when it comes to filing a Written Statement for a counter claim, the same is specifically dealt with under Order VIII Rule 6-A(3) of CPC. In such cases, a duty has been cast upon the Court to fix the time limit. While fixing such time limits, the Court is guided by Order VIII Rule 9 of CPC., wherein the Court can fix a time limit of not more than 30 days for presenting the Written Statement for a counter claim. Even though leave is not required for filing a Written Statement for the counter claim, since it is a matter of right for the Plaintiffs, the Court can always fix a time limit for filing such a Written Statement. Hence, when a counter claim is filed by the Defendants, the Court has to specifically pass an order while taking the counter claim on file, directing summons to be served on the Plaintiffs or if the Plaintiff is represented by a counsel, directing the counsel to accept service of summons on behalf of the Plaintiff. The time limit for filing the Written Statement for the counter claim will commence only thereafter. 23. This Court on the original side is governed by the Madras High Court Original Side Rules. Order V Rules 2 to 5 of the Original Side Rules speaks about the procedure for filing the Written Statement for the counter claim and the time limit within which it has to be filed.
23. This Court on the original side is governed by the Madras High Court Original Side Rules. Order V Rules 2 to 5 of the Original Side Rules speaks about the procedure for filing the Written Statement for the counter claim and the time limit within which it has to be filed. However even under these rules, there is no rigid time limit for filing the Written Statement for the counter claim and discretion is given to the Court to extend the time for filing the Written Statement. These rules must also be kept in mind since there is nothing available under the amended provisions of CPC., governing the Commercial Division running contrary to these rules and which specifically deals with the time limit for filing the Written Statement for a counter claim. Some clarity is required to be given for a Written Statement filed by the Plaintiffs for the counter claim made by the Defendants since Order VIII Rule 1 of CPC., does not apply and it is only Order VIII Rule 6-A (3) which specifically provides for the Court to fix such period for filing the Written Statement. The Court while fixing such a time limit for filing the Written Statement, can always keep in mind the object behind the Commercial Courts Act and ensure that the Written Statement is filed within the mandatory period fixed for the Defendants. It will always be open to the Court acting under the Commercial Courts Act, to forfeit the right of the Plaintiffs if the Written Statement for the counter claim is filed beyond the time limit fixed by the Court, without showing sufficient cause. 24. The judgment of the Hon’ble Supreme Court in SCG Contracts (India) (P) Ltd. -vs- K.S.Chamankar Infrastructure (P) Ltd. [ (2019) 12 SCC 210 ] specifically dealt with the scope of Order VIII Rule 1 r/w Order VIII Rule 10 of CPC. Therefore, the Apex Court was only dealing with the mandatory period fixed for filing a Written Statement by the Defendants. The time period for filing a Written Statement for the counter claim was not within the scope of the said judgment. 25.
Therefore, the Apex Court was only dealing with the mandatory period fixed for filing a Written Statement by the Defendants. The time period for filing a Written Statement for the counter claim was not within the scope of the said judgment. 25. In view of the above discussion, this Court holds that the Proviso to Order VIII Rule 1 of Code of Civil Procedure, which fixes the maximum period for filing the Written Statement as 120 days and which was held to be mandatory by the Hon’ble Supreme Court in SCG Contracts (India) (P) Ltd. -vs- K.S.Chamankar Infrastructure (P) Ltd. [ (2019) 12 SCC 210 ], beyond which the right to file the Written Statement will stand forfeited, will not apply to a Written Statement filed by the Plaintiffs for the counter claim made by the Defendants and such cases will be governed only by the time period fixed by the Court under Order VIII Rule 6 A(3) of CPC. This Court hastens to add that while fixing the time limits, appropriate Orders must be passed as indicated supra and the outer limit of 120 days fixed for the Defendants, must be kept in mind.” However, another Learned Judge of this Court after taking note of the earlier view expressed, struck a different note in Maria Albert Stanly -vs- Diamond Hospital Equipments (Order dated 06.01.2023 in A. No. 3751 of 2022 in C.S. No. 14 of 2022) observing as follows:- “19. Under Order VIII Rule 1 of C.P.C. as amended for the purpose of Commercial Dispute Act, 2015, a Defendant is ordinarily required to file a Written Statement within a period of 30 days of receipt of summons. 20. This period can be extended by another period of 90 days alone. However, the cumulative period cannot exceed more than 120 days from the date of service of summons. Apart from amending Order VIII Rule 1 of CPC, Order V Rule 1 and Order VIII Rule 10 of the CPC also have been amended for the purpose of commercial disputes. 21. These provisions together with their amendments read as under:- Order V Rule 1 of CPC for the purpose of Commercial Courts Act, 2015.
Apart from amending Order VIII Rule 1 of CPC, Order V Rule 1 and Order VIII Rule 10 of the CPC also have been amended for the purpose of commercial disputes. 21. These provisions together with their amendments read as under:- Order V Rule 1 of CPC for the purpose of Commercial Courts Act, 2015. Order VIII Rule 1 of CPC for the purpose of Commercial Courts Act, 2015 (1) When a suit has been duly instituted, a summons may be issued to the Defendant to appear and answer the claim and to file the Written Statement of his defence, if any, within thirty days from the date of service of summons on that Defendant; Provided that no such summons shall be issued when a Defendant has appeared at the presentation of plaint and admitted the Plaintiff’s claim. *“Provided further that where the Defendant fails to file the Written Statement within the said period of thirty days, he shall be allowed to file the Written Statement on such other day, as may be specified by the court, for reasons to be recorded in writing and on payment of such costs as the court deems fit, but which shall not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred and twenty days from the date of service of summons, the Defendant shall forfeit the right to file the Written Statement and the court shall not allow the Written Statement to be taken on record.” 1.
The Defendant shall, within thirty days from the date of service of summons on him, present a Written Statement of his defence: *“Provided that where the Defendant fails to file the Written Statement within the said period of thirty days, he shall be allowed to file the Written Statement on such other day, as may be specified by the court, for reasons to be recorded in writing and on payment of such costs as the court deems fit, but which shall not be later than one hundred and twenty days from the date of service of summons and on expiry of one hundred and twenty days from the date of service of summons, the Defendant shall forfeit the right to file the Written Statement and the court shall not allow the Written Statement to be taken on record.” Order VIII Rule 10 *Provided further that no Court shall make an order to extend the time provided under Rule 1 of this Order for filing of the Written Statement. * as amended for the purpose of Commercial Courts Act, 2015 22. There are no amendments to the CPC as far as to time limit prescribed for filing Reply Statement under the Commercial Courts Act, 2015. 23. The Madras High Court has issued a Practice Note for Commercial Division and Commercial Appellate Division in Madras High Court in exercise of the powers conferred under Section 18 of the Commercial Courts act, 2015 [Formerly Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (Act 4 of 2016)] vide NOTIFICATION No.48/2018 dated 31.01.2018. However, it has not dealt with the delay in filing Reply Statement. 24. The Madras High Court is yet to amend its Original Side Rules after the Commercial Courts Act, 2015 was enacted. Order VIII Rule 9 of C.P.C., deals with subsequent Pleading: Subsequent Pleadings- No pleading subsequent to the Written Statement of a Defendant other than by way of defence to setoff or Counter-Claim shall be presented except by the leave of the Court and upon such terms as the Court thinks fit; but the Court may at any time require a Written Statement or additional Written Statement from any of the parties and fix a time of not more than thirty days for presenting the same. 25. Order VIII Rule 9 of C.P.C. applies only to pleadings subsequent to filing of Written Statement.
25. Order VIII Rule 9 of C.P.C. applies only to pleadings subsequent to filing of Written Statement. Order VIII Rule 9 of C.P.C. does not apply to Reply Statement. As per Order VIII Rule 9 of C.P.C, both Plaintiff and Defendant cannot file any pleading after Written Statement(s) has been filed except with the leave of the Court and upon such terms as the Court thinks fit. 26. The Court may at any time require a Written Statement or additional Written Statement from any of the parties and fix a time of not more than thirty days for presenting the same. 27. After Written Statement/Reply statement is/are filed, subsequent pleadings in the form of additional Written Statement or additional reply statement cannot be allowed to be filed at any stage except with the leave of the Court and upon such terms as the Court thinks fit. 28. Under CPC, for Reply Statement to a Counter claim/set off in the Written Statement of the Defendant, there is a special provision. Filing of Reply Statement governed by Order VIII Rule 6-A to G of CPC. Rule 6A to G in Order VIII of the CPC has not been amended for the purposes of Commercial Disputes. 29. As per sub clause (2) of Rule 6A of Order VIII, Counter-Claim shall have the same effect as a crosssuit so as to enable the Court to pronounce a final judgment in the same suit, both on the original claim and on the Counter-Claim. 30. As per of Rule 6A(3) to Order VIII of C.P.C., the Plaintiff is at liberty to file a Written Statement in answer to the Counter-Claim of the Defendant within such period as may be fixed. Rule 6A(3) of the CPC reads as under:- (3) The Plaintiff shall be at liberty to file a Written Statement in answer to the Counter- Claim of the Defendant within such period as may be fixed by the court. 31. Thus, if Order VIII Rule 6-A (3) of CPC is applied, there is no time limit for filing Reply Statement. The Court can fix the period. However, as per Rule 6-G, the Rules relating to a Written Statement by a Defendant shall apply to a Written Statement (i.e. Reply Statement) to be filed in answer to a counter claim/setoff. Thus, reply statement can be filed within 120 days of service of Written Statement. 32.
The Court can fix the period. However, as per Rule 6-G, the Rules relating to a Written Statement by a Defendant shall apply to a Written Statement (i.e. Reply Statement) to be filed in answer to a counter claim/setoff. Thus, reply statement can be filed within 120 days of service of Written Statement. 32. Under Order VIII Rule 10 of C.P.C. where any party from whom a Written Statement is required under Order VIII Rule 1 or Rule 9 fails to present the same within the time permitted or fixed by the Court, as the case may be, the Court shall pronounce judgment against him, or make such order in relation to the suit as it thinks fit and on the pronouncement of such judgment a decree shall be drawn up. 33. As mentioned above both Rule 1 or Rule 9 of Order VIII do not apply to a Reply Statement to counter claim of a Defendant in the Written Statement. 34. Thus, ordinarily, Reply Statement to the Counter claim of the Defendant by the Plaintiff is governed Order VIII Rule 6A-G. 35. However, Madras High Court is governed by Madras High Court Original Side Rules, 1994 (Original Side Rules for brevity)framed under Section 129 of C.P.C. 36. Under Section 129 of C.P.C, a High Court having Original Side is empowered to frame Rules for its Original Civil Jurisdiction. Section 129 of C.P.C reads as under:- Section 129: Power of the High Court to Make Rules as to their Original Civil Procedure:- Notwithstanding anything in this Code, any High Court not being the Court of a Judicial Commissioner may make such rules not inconsistent with the Letters Patent or order or other law establishing it to regulate its own procedure in the exercise of its original civil jurisdiction as it shall think fit, and nothing herein contained shall affect the validity of any such rules in force at the commencement of this Code. 37. As per the decision of the Hon'ble Supreme Court in Iridium India Telecom Limited -vs- Motorola Inc., [ (2005) 2 MLJ 97 (SC)], Original Side Rules framed under Section 129 of C.P.C the Chartered High Court will override the provisions of CPC. 38. Under the Original Side Rules there are special dispensation, restrictions and limitations prescribed for filing both Written Statement and reply statement to a counter claim of the Defendant by a Plaintiff. 39.
38. Under the Original Side Rules there are special dispensation, restrictions and limitations prescribed for filing both Written Statement and reply statement to a counter claim of the Defendant by a Plaintiff. 39. As far as the limitation for filing Written Statement by a Defendant is concerned, it is now circumscribed by the limitation prescribed in proviso to amended Order V Rule and Order VIII Rule 1 of CPC and in terms of the law laid down by the Hon’ble Supreme Court in SCG Contracts (India) (P) Ltd. -vs- K.S. Chamankar Infrastructure (P) Ltd. [ (2019) 12 SCC 210 ] referred to supra. 40. Limitation for filing Written Statement is governed by Order V Rule 1 of Original Side Rules. However, limitation for filing Reply Statement by the Plaintiff is governed by Order V Rule 3 of the Original Side Rules. 41. As per Order V Rule 3 of Original Side Rules, if the Plaintiff intends to defend any set-off or counter claim filed by a Defendant in the Written Statement, the Plaintiff is required to file a Written Statement (i.e. a Reply Statement) within two weeks after the service upon him of the Defendant’s Written Statement containing the set-off or counter claim, or within a further period of five days with the consent of the Defendant or his advocate with an endorsement on the Plaintiff’s Written Statement (Reply Statement). 42. Under Order V Rule 5 of Original Side Rules, after the expiration of the time limit prescribed under Rule 1 or Rule 3 of the Original Side Rules, a suit shall be posted in the list before the Master. Order V Rules, 1, 3 and 5 are reproduced below for the sake of clarity:- Order V Original Side Rules Rule 1: Entry of appearance and filing of Written Statement. Rule 3: Time for reply statement to Counter-Claim: 1. If the Defendant intends to defend the suit, he shall, within the period limited by the summons served on him, file in Court a Written Statement setting out the grounds of his defence in the form prescribed by the Code, and also stating his address for service: Provided that a Defendant may file his Written Statement within a further period of five days, if the Plaintiff or his advocate consents and signifies such consent by endorsement on the Written Statement.
The costs of obtaining and granting consent shall be costs in the cause. The Defendant shall, within the said period, give notice to the Plaintiff that he has filed a Written Statement, and of his address for service. If the Plaintiff intends to defend any set-off or counterclaim by a Defendant, he shall file a Written Statement within two weeks after the service upon him of the Defendant's Written Statement containing the setoff or Counter-Claim, or within a further period of five days with the consent of the Defendant or his advocate endorsed on the Plaintiff's Written Statement. Rule 5 : Extension of time to file Written Statement. After the expiration of the time limited by Rule 1 or Rule 3 of this Order, a suit shall be posted in the list before the Master. If no Written Statement has been filed by the Defendant under Rule 1 or the Plaintiff under Rule 3, the Master shall enter the suit in the list of 'undefended causes in the former case and the set-off or Counter-Claim in the list 'undefended causes' in the latter case unless he grants further time for filing a Written Statement on application by the concerned party accompanied by an affidavit explaining the delay. The Master shall not grant extension of time exceeding six weeks from the date on which the Written Statement was originally due to be filed. 43. If no Written Statement is filed by the Defendant within a period of six weeks under Order V Rule 1 r/w Order IV Rule 5 of the Original Side Rules, the Master shall enter the suit in the list of ‘undefended causes’. A grace period of 4 days is allowed subject to consent by the Plaintiff or Plaintiff's counsel for admitting the Written Statement. 44. If the Reply Statement by the Plaintiff is not filed within the time stipulated under Rule 3 of Order V, unless the Master grants further time for filing a Written Statement on application by the concerned party accompanied by an affidavit explaining the delay, the such Written Statement (Reply Statement) of the Plaintiff cannot be taken to the file of the case. The Master also cannot grant extension of time for a period exceeding six weeks(42 days = 6 x 7days) from the date on which the Written Statement was originally due to be filed. 45.
The Master also cannot grant extension of time for a period exceeding six weeks(42 days = 6 x 7days) from the date on which the Written Statement was originally due to be filed. 45. Thus, at the expiry of 14th day, a Reply Statement of the Plaintiff can be taken to the file of the suit. Thereafter a further period of 5 days with the consent of the Defendant. A further grace period of 42 days after the expiry of first 14 days on application before the Master. 46. If the above provision is to be applied, a Plaintiff in all has only 56 th day[14 days (without leave) + 42 days (with leave)] to file a Reply Statement. .... 52. Since a different view has been taken by this Court in M/s.CSCO LLC A limited Liability Company Rep.by its Corporate representative Mr.David Apperman -vs- M/s.Lakshmi Saraswathi Spintex Limited Rep.by its Managing Director (Order dated 28.01.2022 in A. No. 4791 of 2021 in C.S. No.697 of 2017, in the fitness of thing, it would be apt to refer to refer to the issue to a larger Bench. The matter also require clarification as several cases of similar nature are being listed. If a contrary view is accepted, it will lead to confusion. Therefore, it needs to be addressed and answered by a Larger Bench. 53. Registry is therefore directed to place this case before the Hon'ble The Chief Justice, for passing suitable order for constituting Larger Bench to answer the following:- (i) Whether the delay in filing Reply Statement beyond the period of 42 days after the expiry of initial 14 days for filing Reply Statement under Order V Rule 3 read with Rule 5 of CPC can be condoned? (ii) If so, whether such application has to be listed before the regular Court or before the Masters Court? (iii)Whether delay beyond the period of 56 days (14 +42) can be condoned by invoking Section 5 of the Limitation Act?” (iv)…. 3. Further, the same Learned Judge in another set of cases in Sanjeev Khandelwal -vs- Palani Medicals (Order dated 05.01.2023 in Tr. C.S. Nos. 912 to 914 and 917 of 2007) had passed the following order:- “6.
(iii)Whether delay beyond the period of 56 days (14 +42) can be condoned by invoking Section 5 of the Limitation Act?” (iv)…. 3. Further, the same Learned Judge in another set of cases in Sanjeev Khandelwal -vs- Palani Medicals (Order dated 05.01.2023 in Tr. C.S. Nos. 912 to 914 and 917 of 2007) had passed the following order:- “6. Already by a separate order, this Court has referred the issue to the Hon'ble the Chief Justice for constituting the Larger Bench to answer the issue in view of the specific limitation prescribed under Order V of the Original Side Rules dealing with Reply Statement to a Counter Claim of the defendants. 7. The amendment to the Commercial Courts Act, 2015, also has not touched Order VIII Rule 6(A-G) of C.P.C. and therefore, in the light of the decision of the Hon'ble Supreme Court in Iridium India Telecom Limited -vs- Motorola Inc. [2004(1) Mh.L.J.(S.C.)532], the Reply Statement to a Counter Claim will be governed by the provisions of the Original Side Rules. 8. Considering the above, in addition to the points referred in the above case, the Hon'ble the Acting Chief Justice may also referred the following points for consideration to be answered by the Larger Bench:- (i) Whether a determination to the Jurisdiction of the Court is required under the provisions of the Commercial Courts Act, 2015, in respect of the suits, which were filed before the implementation of the Commercial Courts Act, 2015 for the Madras High Court? (ii) Whether a limitation for such transferred suits and when a limitation would commence for filing the Reply Statement to the Written Statement? 4. That apart, the same Learned Judge had again in Kovilpatti Lakshmi Roller Flour Mills Limited -vs- P.R.Srinivasan & Co. (Order dated 05.01.2023 in C.S. (Comm. Div.) No. 48 of 2022) directed that suit along with its applications to be heard along with the aforesaid cases. 5. It is in the said backdrop that the matter requires an authoritative pronouncement on questions of law mentioned earlier in suits relating to commercial disputes in the Original Side of this Court. 6. We have extensively heard Mr. M.S.Bharath, Mr. G.Ramesh and Mr. SP.Chockalingam, Learned Counsel appearing for the Plaintiffs and Mr. P.C.N.Raghupathy, Mr. M.R.Gokul Krishnan, Mr. K.Rahavan, Mr. R.Sanjeev, Mr. M.S.Bharath, Mr. N.Ramaswami, Mr. C.P.Sivamohan, Mr. V.Dharmandar, Mr. Tarun Rao Kallakuru, Mr. Akhil Bhansali and Mr.
6. We have extensively heard Mr. M.S.Bharath, Mr. G.Ramesh and Mr. SP.Chockalingam, Learned Counsel appearing for the Plaintiffs and Mr. P.C.N.Raghupathy, Mr. M.R.Gokul Krishnan, Mr. K.Rahavan, Mr. R.Sanjeev, Mr. M.S.Bharath, Mr. N.Ramaswami, Mr. C.P.Sivamohan, Mr. V.Dharmandar, Mr. Tarun Rao Kallakuru, Mr. Akhil Bhansali and Mr. V.S.Kishore Kumar, Learned Counsel appearing for the Defendants and perused the materials placed on record, apart from the pleadings of the parties. 7. Before proceeding further, it would be necessary to extract Sections 15 and 16 of the Commercial Courts Act, 2015 (hereinafter referred to as 'the CC Act' for short), which read as follows:- “15. Transfer of pending cases.—(1) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of a Specified Value pending in a High Court where a Commercial Division has been constituted, shall be transferred to the Commercial Division. (2) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of a Specified Value pending in any civil court in any district or area in respect of which a Commercial Court has been constituted, shall be transferred to such Commercial Court: Provided that no suit or application where the final judgment has been reserved by the Court prior to the constitution of the Commercial Division or the Commercial Court shall be transferred either under sub-section (1) or sub-section (2). (3) Where any suit or application, including an application under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of Specified Value shall stand transferred to the Commercial Division or Commercial Court under subsection (1) or sub-section (2), the provisions of this Act shall apply to those procedures that were not complete at the time of transfer.
(4) The Commercial Division or Commercial Court, as the case may be, may hold case management hearings in respect of such transferred suit or application in order to prescribe new timelines or issue such further directions as may be necessary for a speedy and efficacious disposal of such suit or application in accordance with Order XV-A of the Code of Civil Procedure, 1908 (5 of 1908): Provided that the proviso to sub-rule (1) of Rule 1 of Order V of the Code of Civil Procedure, 1908 (5 of 1908) shall not apply to such transferred suit or application and the court may, in its discretion, prescribe a new time period within which the written statement shall be filed. (5) In the event that such suit or application is not transferred in the manner specified in sub-section (1), sub-section (2) or sub-section (3), the Commercial Appellate Division of the High Court may, on the application of any of the parties to the suit, withdraw such suit or application from the court before which it is pending and transfer the same for trial or disposal to the Commercial Division or Commercial Court, as the case may be, having territorial jurisdiction over such suit, and such order of transfer shall be final and binding. 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.
(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 (5 of 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.” It would assume significance to notice here that Rules 6-A to 6-G of Order VIII of the Code of Civil Procedure, 1908 (hereinafter referred to as 'the CPC' for short), which have not been amended by the CC Act, read as follows:- “6A. Counter-Claim by Defendant.—(1) A Defendant in a suit may, in addition to his right of pleading a setoff under rule 6, set up, by way of Counter-Claim against the claim of the Plaintiff, any right or claim in respect of a cause of action accruing to the Defendant against the Plaintiff either before or after the filing of the suit but before the Defendant has delivered his defence or before the time limited for delivering his defence has expired, whether such Counter-Claim is in the nature of a claim for damages or not: Provided that such Counter-Claim shall not exceed the pecuniary limits of the jurisdiction of the court. (2) Such Counter-Claim shall have the same effect as a cross-suit so as to enable the Court to pronounce a final judgment in the same suit, both on the original claim and on the Counter-Claim. (3) The Plaintiff shall be at liberty to file a Written Statement in answer to the Counter-Claim of the Defendant within such period as may be fixed by the court. (4) The Counter-Claim shall be treated as a plaint and governed by the rules applicable to plaints. 6B. Counter-Claim to be stated.— Where any Defendant seeks to rely upon any ground as supporting a right of Counter-Claim, he shall, in his Written Statement, state specifically that he does so by way of Counter-Claim. 6C.
(4) The Counter-Claim shall be treated as a plaint and governed by the rules applicable to plaints. 6B. Counter-Claim to be stated.— Where any Defendant seeks to rely upon any ground as supporting a right of Counter-Claim, he shall, in his Written Statement, state specifically that he does so by way of Counter-Claim. 6C. Exclusion of Counter-Claim.—Where a Defendant sets up a Counter-Claim and the Plaintiff contends that the claim thereby raised ought not to be disposed of by way of Counter-Claim but in an independent suit, the Plaintiff may, at any time before issues are settled in relation to the Counter-Claim, apply to the Court for an order that such Counter-Claim may be excluded, and the Court may, on the hearing of such application make such order as it thinks fit. 6D. Effect of discontinuance of suit.— If in any case in which the Defendant sets up a counterclaim, the suit of the Plaintiff is stayed, discontinued or dismissed, the Counter-Claim may nevertheless be proceeded with. 6E. Default of Plaintiff to reply to Counter-Claim.— If the Plaintiff makes default in putting in a reply to the Counter-Claim made by the Defendant, the Court may pronounce judgment against the Plaintiff in relation to the Counter-Claim made against him, or make such order in relation to the Counter-Claim as it thinks fit. 6F. Relief to Defendant where Counter-Claim succeeds.— Where in any suit a set-off or counterclaim is established as a defence against the Plaintiff’s claim and any balance is found due to the Plaintiff or the Defendant, as the case may be. the Court may give judgment to the party entitled to such balance. 6G. Rules relating to Written Statement to apply.— The rules relating to a Written Statement by a Defendant shall apply to a Written Statement filed in answer to a Counter-Claim.” On a conspectus of the aforesaid statutory provisions, the following legal position would emerge:- (i) The CC Act would have overriding effect in respect of the inconsistent provisions of the Madras High Court Original Side Rules.
(ii) In respect of suits relating to commercial disputes pending in the Original Side of this Court at the time of commencement of the CC Act on 23.10.2015, the Commercial Division of this Court may hold case management hearings in respect of those suits in order to prescribe new timelines or issue such further directions as may be necessary for a speedy and efficacious disposal of such suits in accordance with Order XV-A of CPC. (iii) The rules relating to a Written Statement by a Defendant shall apply to a Written Statement filed in answer to a Counter-Claim. (iv) The Counter-Claim shall have the same effect as a cross-suit so as to enable the Court to pronounce a final judgment in the same suit, both on the original claim and on the Counter-Claim. (v) The Counter-Claim shall be treated as a plaint and governed by the rules applicable to plaints. (vi) If a Plaintiff makes default in putting in a reply to the Counter-Claim made by a Defendant, the Court may pronounce judgment against a Plaintiff in relation to the Counter-Claim made against him, or make such order in relation to the Counter-Claim as it thinks fit. 8. At this juncture, it would be useful to refer to the relevant passages from the decision of the Hon'ble Supreme Court of India in SCG Contracts (India) Private Limited -vs- K.S.Chamankar Infrastructure Private Limited [ (2019) 12 SCC 210 ], where it has been laid down that a Written Statement filed by a Defendant in a suit cannot be entertained beyond a period of 120 days from the date of service of summons in that suit, which read as follows:- “8. The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 came into force on 23-10-2015 bringing in their wake certain amendments to the Code of Civil Procedure.
The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 came into force on 23-10-2015 bringing in their wake certain amendments to the Code of Civil Procedure. In Order 5 Rule 1, sub-rule (1), for the second proviso, the following proviso was substituted: “Provided further that where the Defendant fails to file the Written Statement within the said period of thirty days, he shall be allowed to file the Written Statement on such other day, as may be specified by the court, for reasons to be recorded in writing and on payment of such costs as the court deems fit, but which shall not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred and twenty days from the date of service of summons, the Defendant shall forfeit the right to file the Written Statement and the court shall not allow the Written Statement to be taken on record.” Equally, in Order 8 Rule 1, a new proviso was substituted as follows: “Provided that where the Defendant fails to file the Written Statement within the said period of thirty days, he shall be allowed to file the Written Statement on such other day, as may be specified by the court, for reasons to be recorded in writing and on payment of such costs as the court deems fit, but which shall not be later than one hundred and twenty days from the date of service of summons and on expiry of one hundred and twenty days from the date of service of summons, the Defendant shall forfeit the right to file the Written Statement and the court shall not allow the Written Statement to be taken on record.” This was re-emphasised by re-inserting yet another proviso in Order 8 Rule 10 CPC, which reads as under: “10.
Procedure when party fails to present Written Statement called for by court.— Where any party from whom a Written Statement is required under Rule 1 or Rule 9 fails to present the same within the time permitted or fixed by the court, as the case may be, the court shall pronounce judgment against him, or make such order in relation to the suit as it thinks fit and on the pronouncement of such judgment a decree shall be drawn up: Provided further that no court shall make an order to extend the time provided under Rule 1 of this Order for filing of the Written Statement.” A perusal of these provisions would show that ordinarily a Written Statement is to be filed within a period of 30 days. However, grace period of a further 90 days is granted which the Court may employ for reasons to be recorded in writing and payment of such costs as it deems fit to allow such Written Statement to come on record. What is of great importance is the fact that beyond 120 days from the date of service of summons, the Defendant shall forfeit the right to file the Written Statement and the Court shall not allow the Written Statement to be taken on record. This is further buttressed by the proviso in Order 8 Rule 10 also adding that the court has no further power to extend the time beyond this period of 120 days. .... 10. Several High Court judgments on the amended Order 8 Rule 1 have now held that given the consequence of non-filing of Written Statement, the amended provisions of the CPC will have to be held to be mandatory. See Oku Tech (P) Ltd. -vs- Sangeet Agarwal (2016 SCC OnLine Del 6601) by a learned Single Judge of the Delhi High Court dated 11-8-2016 in CS (OS) No. 3390 of 2015 as followed by several other judgments including a judgment of the Delhi High Court in Maja Cosmetics -vs- Oasis Commercial (P) Ltd. (2018 SCC OnLine Del 6698). 11.
See Oku Tech (P) Ltd. -vs- Sangeet Agarwal (2016 SCC OnLine Del 6601) by a learned Single Judge of the Delhi High Court dated 11-8-2016 in CS (OS) No. 3390 of 2015 as followed by several other judgments including a judgment of the Delhi High Court in Maja Cosmetics -vs- Oasis Commercial (P) Ltd. (2018 SCC OnLine Del 6698). 11. We are of the view that the view taken by the Delhi High Court in these judgments is correct in view of the fact that the consequence of forfeiting a right to file the Written Statement; non-extension of any further time; and the fact that the Court shall not allow the Written Statement to be taken on record all points to the fact that the earlier law on Order 8 Rule 1 on the filing of Written Statement under Order 8 Rule 1 has now been set at naught. .... 16. The learned counsel for the respondents then strongly relied upon the inherent powers of the court to state that, in any case, a procedural provision such as contained in the amendment, which may lead to unjust consequences can always, in the facts of a given case, be ignored where such unjust consequences follow, as in the facts of the present case. We are again of the view that this argument has also no legs to stand on, given the judgment of this Court in Manohar Lal Chopra -vs- Seth Hiralal ( AIR 1962 SC 527 ). In this judgment, the Court held: “39. The suit at Indore which had been instituted later, could be stayed in view of Section 10 of the Code. The provisions of that section are clear, definite and mandatory. A court in which a subsequent suit has been filed is prohibited from proceeding with the trial of that suit in certain specified circumstances. When there is a special provision in the Code of Civil Procedure for dealing with the contingencies of two such suits being instituted, recourse to the inherent powers under Section 151 is not justified.” Clearly, the clear, definite and mandatory provisions of Order 5 read with Order 8 Rules 1 and 10 cannot be circumvented by recourse to the inherent power under Section 151 to do the opposite of what is stated therein.” 9.
It would also be beneficial, in this context, to take note of the dictum laid down by the Constitution Bench of the Hon'ble Supreme Court of India in New India Assurance Company Limited -vs- Hilli Multipurpose Cold Storage Private Limited [ (2020) 5 SCC 757 ], while dealing with the following questions:- (i) Whether Section 13(2)(a) of the Consumer Protection Act, 1986, which provides for the Respondent/opposite party filing its response to the complaint within 30 days or such extended period, not exceeding 15 days, should be read as mandatory or directory i.e. whether the District Forum has the power to extend the time for filing the response beyond the period of 15 days, in addition to 30 days? (ii) What would be the commencing point of limitation of 30 days under Section 13 of the Consumer Protection Act, 1986? i.e. whether the commencing point of limitation of 30 days would be from the date of receipt of the notice accompanies with the complaint by the opposite party, or merely on the receipt of the complaint?, Which have been answered as follows:- “62. To conclude, we hold that our answer to the first question is that the District Forum has no power to extend the time for filing the response to the complaint beyond the period of 15 days in addition to 30 days as is envisaged under Section 13 of the Consumer Protection Act; and the answer to the second question is that the commencing point of limitation of 30 days under Section 13 of the Consumer Protection Act would be from the date of receipt of the notice accompanied with the complaint by the opposite party, and not mere receipt of the notice of the complaint.” 10. Now coming back to the reference made, it must be pointed out here that a Defendant may raise a Counter-Claim either in the Written Statement itself or may file a separate pleading for it. However, in both situations, a Plaintiff is entitled, as of right, to answer the Counter-Claim by filing his Written Statement for it. As a corollary in compliance of the principles of natural justice, it would follow that when a Defendant makes a Counter-Claim and the Commercial Court takes it on file after scrutiny, a Plaintiff has to be put on notice so as to file his Written Statement for it. 11.
As a corollary in compliance of the principles of natural justice, it would follow that when a Defendant makes a Counter-Claim and the Commercial Court takes it on file after scrutiny, a Plaintiff has to be put on notice so as to file his Written Statement for it. 11. Having due regard to the aforesaid germane aspects of the matter, it must be held that by operation of Rule 6-G of Order VIII of CPC read with Sections 15(3) and (4) and 16(3) of the CC Act and the other provisions of CPC as amended by the CC Act as noticed in the decision of the Hon'ble Supreme Court of India in SCG Contracts (India) Private Limited -vs- K.S.Chamankar Infrastructure Private Limited [ (2019) 12 SCC 210 ], a Plaintiff on receipt of copy of the Counter-Claim made by a Defendant is entitled to file his Written Statement in response within 30 days, and if it is filed after the said period, but before the expiry of 90 days thereafter (aggregating to 120 days on the whole), the Commercial Court on satisfactory explanation from the Plaintiff in an application is empowered to condone such delay, but such right to file Written Statement shall axiomatically stand forfeited thereafter. 12. The next task is to ascertain the date of reckoning the said period of 120 days for filing Written Statement by a Plaintiff to the Counter-Claim made by the Defendant. As already highlighted, it is only when a Plaintiff is informed that a Counter-Claim has been made by a Defendant and he has been supplied with its copy along with the documents relied in support thereof, he would be in a position to effectively defend it by filing Written Statement. In this regard, apart from taking judicial notice of the practice existing in various Courts across the State and the submissions made by the Bar in that regard, it has to be accepted that there is no uniform procedure hereto followed regarding taking on file a Counter-Claim made by a Defendant after scrutiny by the Registry and informing the Plaintiff of the same.
In such circumstances, pending framing of specific rules in the exercise of powers conferred under Section 18 of the CC Act in that regard, it has become imperative to issue the following directions:- (i) The Commercial Division of this Court and the Commercial Courts across the State shall with effect from 01.01.2024 conduct scrutiny of every Counter-Claim before it is taken on file by the respective Courts and the statutory provisions applicable for taking on file plaint in suits in the Commercial Court shall mutatis mutandi apply in that regard. (ii) When a Counter-Claim made by a Defendant is taken on file after scrutiny, the Registry of the concerned Court shall serve notice of such Counter-Claim along with its copy, either on the Plaintiff or his Advocate, in the same manner as provided for suits in commercial disputes. (iii) The period for filing the Written Statement by a Plaintiff in response to a Counter-Claim filed by a Defendant shall be reckoned from the date on which that notice along with copy of the Counter-Claim is served by the Registry of the Court on the Plaintiff or his Advocate, as the case may be. (iv) While serving the notice with copy of the Counter-Claim on the Plaintiff, it shall be ensured that the copies of all documents relied by the Defendant in support of the Counter- Claim are simultaneously delivered to him. 13. This takes to the residuary question as to the procedure to be followed for computation of limitation for filing Written Statement by a Plaintiff in response to a Counter-Claim made by a Defendant in suits relating to commercial dispute received till date. As already noticed, the relevant date for commencing the period of limitation for filing a Written Statement by a Plaintiff to a Counter-Claim made by a Defendant would be the date on which a Plaintiff or his Advocate has received the final authenticated copy of the Counter-Claim along with copies of documents relied by a Defendant in support of it, which would mean that the concerned Court would have to endeavour to ascertain the said date on case to case basis from the materials available on record.
However, in respect of suits instituted before the commencement of the CC Act on 23.10.2015, the timeline for filing Written Statement by a Plaintiff in response to a Counter-Claim made by a Defendant in such suit would be such period as may be fixed by the Commercial Court during case management hearings in the exercise of powers under the proviso to Section 15(4) of the CC Act read with Order XV-A of CPC in that regard. 14. In view of the aforesaid conclusions arrived, it is not possible to concur with the ruling of the Learned Judge of this Court in M/s.CSCO LLC -vs- M/s.Lakshmi Saraswathi Spintex Limited (Order dated 28.01.2022 in A.No. 4791 of 2021 in C.S. No. 697 of 2017), insofar as it holds that the dictum laid down by the Hon'ble Supreme Court of India in SCG Contracts (India) Private Limited -vs- K.S.Chamankar Infrastructure Private Limited [ (2019) 12 SCC 210 ] will not apply to a Written Statement filed by a Plaintiff in response to a Counter-Claim made by a Defendant, as it does not reflect the correct position of law, particularly when Rule 6-G of Order VIII of CPC has not been taken into account. 15. The questions referred in Maria Albert Stanly -vs- Diamond Hospital Equipments (Order dated 06.01.2023 in A. No. 3751 of 2022 in C.S. No. 14 of 2022) and Sanjeev Khandelwal -vs- Palani Medicals (Order dated 05.01.2023 in Tr. C.S. Nos. 912 to 914 and 917 of 2007) is founded upon the premise that the provisions of the Madras High Court Original Side Rules would override the provisions of CPC including the amendments made thereto by the CC Act. In this context, it must be pointed out that by virtue of Section 16(3) of the CC Act, the provisions of the Madras High Court Original Side Rules, which are inconsistent with the new dispensation under the CC Act amending the provisions of CPC, would axiomatically cease to be in operation. In other words, it would be erroneous to rely on the existing provisions of the Madras High Court Original Side Rules for the purpose of computation of limitation for filing of Written Statement by a Plaintiff in response to a Counter-Claim made by a Defendant in a suit relating to commercial dispute.
In other words, it would be erroneous to rely on the existing provisions of the Madras High Court Original Side Rules for the purpose of computation of limitation for filing of Written Statement by a Plaintiff in response to a Counter-Claim made by a Defendant in a suit relating to commercial dispute. In the absence of specific rules made in the Madras High Court Original Side Rules after commencement of the CC Act, all applications for condonation of delay upto a maximum period of 120 days in filing the Written Statement by a Plaintiff in response to a Counter- Claim made by a Defendant shall be heard by the concerned Court, and not by the Master, whose powers are confined only to hearing those applications expressly mentioned in the existing provisions of the Madras High Court Original Side Rules. 16. In the upshot, the reference is answered on the aforesaid terms, and all the present suits along with the connected applications shall be placed before the Learned Judge presiding over the Commercial Division of the Court to be decided accordingly.