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2025 DIGILAW 1122 (SC)

Harirajan Pillai v. Siyad

2025-05-05

DIPANKAR DATTA, MANMOHAN

body2025
ORDER : 1. Leave granted. 2. We are completely taken aback, having read the judgment and order dated 12th July, 2023 of the High Court of Kerala at Ernakulam, whereby it dismissed a petition under Article 227 of the Constitution [OP (C) No. 946 of 2023] presented before by the appellant. 3. The appellant, as plaintiff, had instituted a suit[CS No. 45 of 2020] on 5th October, 2020, before the relevant Commercial Court, seeking realisation of licence fees amounting to Rs.16,46,906/- (Rupees sixteen lakh forty-six thousand nine hundred six) only with interest thereon @ 12% per annum against the defendant, who is the respondent here. As defendant, the respondent entered appearance in the suit on 10th November, 2020, and sought time to file written statement. The statutory period of 120 (one hundred twenty) days to file the written statement expired on 9th March, 2021. The respondent was set ex parte by the Commercial Court. On 31st March, 2021, the Commercial Court decreed in the manner as follows: 'In the result, suit is decreed with costs. Plaintiff is entitled to realize Rs. 14,40,920/- together with interest thereon at 6% per annum from the date of suit till realization and the costs of the suit from the defendants and their assets.' 4. The respondent filed an application on 24th May, 2022 praying for setting aside of the ex parte decree. An order was passed requiring the respondent to make payment of Rs. 2,000/- (Rupees two thousand) only. The respondent did not pay and, hence, the application for setting aside the decree stood dismissed. 5. On 16th June, 2022, the respondent filed an application for restoration. An order was passed on the restoration application requiring the respondent to keep in deposit Rs. 10,000/- (Rupees ten thousand) only. Though the said amount was deposited by the respondent, it was not brought to the notice of the court and the restoration application was, therefore, dismissed. 6. This prompted the respondent to file a review application. The court reviewed the order earlier passed and restored the application for setting aside the ex parte decree on 18th March, 2023. 7. Aggrieved by the order dated 18th March, 2023, the appellant approached the High Court to set aside the order passed by the Commercial Court. 6. This prompted the respondent to file a review application. The court reviewed the order earlier passed and restored the application for setting aside the ex parte decree on 18th March, 2023. 7. Aggrieved by the order dated 18th March, 2023, the appellant approached the High Court to set aside the order passed by the Commercial Court. Without exercising its power of superintendence under Article 227 of the Constitution, which was called for, the High Court while dismissing the application of the appellant went on to make the following observations: 'The question whether Section 5 of the Limitation Act, 1963 would come into play, when there is sufficient reason for not submitting the written statement within the time scheduled as mandated under the Commercial Court Act was not addressed by the trial court. In fact, the mandate under the schedule to submit the written statement, attached to the commercial court though intended for speedy disposal of the matter is amenable under Section 5 of the Limitation Act, 1963. But, it shall not be allowed in a routine way unless there is a warranting reason. Unless there is warranting reason to the extent of making the party incapable of submitting the written statement within the stipulated period, the court can extent the benefit under Section 5 of the Limitation Act, so as to advance justice, otherwise, it will result in gross injustice. It is a suit for recovery of an amount of more than Rs.14 lakhs. At this juncture, the learned counsel for the respondent fairly submitted that in addition to the cost ordered by the trial court, which comes to Rs.2000/- and 1000/-, they are prepared to pay or deposit an additional amount of Rs.25,000/-. The submission made by the learned counsel, hence recorded, and in the circumstance involved in the present case, I am of the view that it is fit and proper to grant an opportunity to the defendant to contest the suit and deposit an amount of Rs.25000/- in addition to the amount ordered by the trial court within 30 days from today. The present original petition will stand dismissed. In the event of failure to pay the amount within that time, Exts.P9 and P11 orders will stand set aside by allowing this original petition.' 8. The present original petition will stand dismissed. In the event of failure to pay the amount within that time, Exts.P9 and P11 orders will stand set aside by allowing this original petition.' 8. In course of hearing, we have been apprised by the respondent that he has made payment of the amount directed by the High Court. 9. However, we are pained to observe how the High Court has ignored a binding precedent. The impugned order of the High Court is in the teeth of the decision of this Court in SCG Contracts (India) Private Limited vs. K.S. Chamankar Infrastructure Private Limited and Others, (2019) 12 SCC 210 . 10. The dictum, expressed in clear terms in paragraph 8' of the aforesaid decision, is that once the period of 120 (one hundred twenty) days lapses, the defendant in a commercial suit forfeits its right to file the written statement and the court is not empowered to allow the written statement to be taken on record beyond such period. 11. In such circumstances, the High Court grossly erred in not interfering with the order of the Commercial Court. 12. The impugned order is clearly indefensible; hence, the same stands set aside. 13. The ex parte decree passed by the Commercial Court is restored. The appellant may levy execution, in accordance with law. 14. Any amount deposited by the respondent in terms of the order of the High Court shall be adjusted with the costs of the suit, as decreed. 15. The appeal stands allowed. 16. Pending application(s), if any, stand disposed of.