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Condonation Of Delay In Filing The Written Statement In A Commercial Dispute

Recently in a Judgement pronounced by Hon'ble High Court of Delhi, Division Bench on 04.05.2022 in Appeal bearing FAO(OS) (COMM) 106/2022 titled as Vidhi Electrical & Eng Co Vs C & S Electric Ltd. addressed the issue of Right to file Written Statement beyond prescribed period in a Commercial Matter.

In this case, neither the Defendant filed the Written statement within 30 days nor on the extended 120 days of service of summons of the suit. Even when Written statement was filed , no application seeking extension of time in filing the written statement was filed by the Defendant.

Subsequently, the Defendant filed application in order to take on record the written statement. It is important to mentioned that no application seeking condonation of delay in filing the written statement was filed by the defendant, along with filing the written statement.

This application was dismissed as there was no any application for seeking condonation of delay in filing the written statement.

The Hon'ble Division Bench emphasized that delay in filing the Written statement can not be condoned in a casual manner. The Defendant to justify the delay in filing the written statement.

The Hon'ble Division Bench also referred to recent Judgement pronounced by Hon'ble Supreme Court of India titled as SCG Contracts India Pvt. Ltd. vs. KS Chamankar Infrastructure Pvt. Ltd. (2019) 12 SCC 2020.

The Hon'ble Supreme Court of India , in the afore mentioned Judgement SCG Contracts India Pvt. Ltd. vs. KS Chamankar Infrastructure Pvt. Ltd. dealt with the issue of taking on record the written statement in a commercial matter. The finding of Hon'ble Supreme Court of India was as under:

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.

The afore mentioned Judgement clearly stipulated the maximum time for filing written statement in a Commercial Suit is 120 days. Once that time is over, the Defendant can not be allowed to place on record the written statement.

Similar view was taken by Hon'ble Division Bench, High Court of Delhi in its Judgement dated 14.07.2021 passed in Appeal titled as Sunil Sahoo Vs Anoop Kumar Jain bearing No. FAO (COMM) 110/2021. In the said Judgement, the Hon'ble Division Bench of India, High Court of Delhi emphasized that in case the Defendant does not file written statement within stipulated time, then while filing the written statement, application seeking condonation of delay application is required to be filed.

As in subject matter Commercial Dispute, no application seeking condonation of delay in filing the written statement was filed by the Defendant, the Division Bench held that order refusing to take on record the written statement was rightly refused.

The Legal position regarding right to file Written Statement beyond prescribed period in a Commercial Matter as of today is that the Defendant is required to file the written statement within 30 days or the further extended period of 120 days of service of summons of the suit.

Its not as if the written statement filed within 120 days of service of summons of the suit , would be taken on record automatically. The Defendant has to Justify the delay in filing the written statement.

Important requirement is also this that the Defendant is required to file application seeking condonation of delay in filing the written statement, while filing the written statement. Still it is not a matter of right. The Court is having discretion to allow or refuse in granting condonation of delay in filing the written statement. There fore it is always advisable for a defendant to file the written statement within 30 days of service of summons of the suit.

Written By: Ajay Amitabh Suman: Advocate, Hon'ble High Court of Delhi
Email: [email protected], Ph no: 09990389539

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