Bombay High Court
Multi Commodity Exchange Clearing ... vs Dhanera Diamonds on 20 April, 2023
Author: R.I. Chagla
Bench: R.I. Chagla
2023:BHC-OS:3356
19,20.IAL.9650.23 in COMS.16.23.wt..doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
INTERIM APPLICATION (L) NO. 9650 OF 2023
IN
COMMERCIAL SUIT NO. 16 OF 2023
Multi Commodity Exchange Of India ... Applicant
In the matter between
Dhanera Diamonds ... Plaintiff
Versus
Multi Commodity Exchange Of India & Ors.... Defendants
WITH
INTERIM APPLICATION (L) NO. 9651 OF 2023
IN
COMMERCIAL SUIT NO. 16 OF 2023
Multi Commodity Exchange
Clearing Corporation Limited ... Applicant
In the matter between
Dhanera Diamonds ... Plaintiff
Versus
Multi Commodity Exchange Of India & Ors.... Defendants
Mr. Sameer Pandit a/w Ms. Sarrah Khambati i/b Wadia Ghandy & Co. for
the Applicant.
Mr. Arvind Lakhawat a/w Mr. Durgaprasad Poojari for the Plaintiff.
Riya Gokalgandhi i/b KHP Partners for Defendant No.3.
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19,20.IAL.9650.23 in COMS.16.23.wt..doc
CORAM : R.I. CHAGLA, J.
DATED : 20th APRIL, 2023.
ORDER :
1 By these Interim Applications the Defendant Nos.1 and 2 have sought condonation of delay of 46 days in filing the written statement dated 31.03.2023 on behalf of Defendant No.1. The Applicant has stated that the summons in the captioned Suit was served on 18.01.2023 i.e. almost three years after the Suit having been filed and cause of action arose. There are certain facts which have been brought to the notice of this Court including that the Plaint in the captioned Suit having been served on the Defendants by the Plaintiff by e-mail sent on 16.06.2020. The Suit having been dismissed for non-compliance of office objection on 05.03.2022 and, thereafter, restored on 21.10.2022. Further, extension of time had been granted for clearing objections on 17.11.2022 and the Suit being finally numbered on 09.01.2022.
2 The learned Counsel appearing for the Applicants/Defendant Nos.1 and 2 has referred to paragraph 3 of the Interim Application and in particular the reasons for the delay in filing of the written statement which was ready on 31.03.2023 and served on the Plaintiff. The Interim Application has also been filed on the same date.
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19,20.IAL.9650.23 in COMS.16.23.wt..doc 3 The Learned Counsel for the Applicant has stated that the cause of action in the captioned Suit is a challenge to circular dated 21.04.2020 issued by Defendant Nos.1 and 2 as being null, void, illegal, no effect and liable to be set aside. In view of the circular being issued in April, 2020, the incidents have taken place during that period. In view of Covid-19, the Defendant No.1, though continuing its operation of working with very limited staff, had difficulty in locating and ascertaining the facts, records and documents relating to that period. The learned Counsel for the Applicant has referred to certain employees who were supervising those events having subsequently left service on 06.12.2022 as well as on 13.10.2022 and 08.07.2022. This is referred to in sub-paragraph (b) of paragraph 3 of the Interim Application. As a result, other officers of Defendant No.1 took time to ascertain and verify the true and correct facts in the matter.
4 There are co-lateral proceeding which has been referred to in sub-paragraph (c) of paragraph 3 of the Interim Application, namely arbitration proceedings between Defendant No.3 and the Plaintiff in relation to the same cause of action. The Applicant was advised to review these proceedings and taking note of information and documents pertaining to those proceeding which took considerable period of time. Waghmare 3/6 ::: Uploaded on - 25/04/2023 ::: Downloaded on - 17/06/2023 14:54:22 :::
19,20.IAL.9650.23 in COMS.16.23.wt..doc 5 The learned Counsel for the Applicant has also referred to several proceedings in respect of same cause of action which were instituted in various Courts of the countries including High Courts of the State of Punjab and Haryana, Rajasthan, Gujarat, Telangana and Delhi as well as Supreme Court of India. The Applicant being occupied in those proceedings and prosecuting the same across the various Courts of the Country and some of the proceedings relating to same broker i.e. Defendant No.3, considerable period of time was spent in ascertaining the stand taken in these proceedings.
6 The learned Counsel for the Applicant has submitted that the delay is within the permissible period of 120 days as per the proviso to Order VIII Rule 1 of the Code of Civil Procedure. He has further submitted that the writ of summons was not filed within the time prescribed under Rule 87 of the Bombay High Court (Original Side) Rules, as the Suit was filed in 2020 and writ of summons served only on 18.01.2023 i.e. beyond the permissible period is required to be taken note of. 7 The learned Counsel appearing for the Plaintiff has submitted that the Plaint was served on the Applicants by e-mail on 16.06.2020. Hence, the reasons given for the delay and/or justification for the delay is misconceived as the Applicant was aware of the cause of action in the Suit. Waghmare 4/6 ::: Uploaded on - 25/04/2023 ::: Downloaded on - 17/06/2023 14:54:22 :::
19,20.IAL.9650.23 in COMS.16.23.wt..doc Thus, the Applicant had sufficient time to prepare the written statement to file it within the statutory period as prescribed under Order VIII Rule 1 of the Code of Civil Procedure. He has also submitted that the Suit had been filed at the time when the Covid-19 pandemic was ongoing and thus had to be e-filed and, thereafter, objections were raised only much later and the Suit came to be dismissed for non-compliance of office objections. It was only upon restoration of the Suit that the writ of summons could be served. He has submitted that under the proviso to Order VIII Rule 1 of the Code of Civil Procedure, as amended by the Commercial Courts Act, this Court is obligated to impose costs where unsatisfactory reasons for the delay has been given by the Applicant.
8 Having considered the submissions, in my view, there is a case made out by the Applicant for condonation of delay in filing the written statement, particularly taking note of the fact that the writ of summons was served on 18.01.2023 and the delay of 46 days beyond the statutory period of 30 days has been satisfactorily explained. The Applicant is not obligated to prepare the written statement merely upon service of the Plaint on 16.06.2020 as it is a statutory requirement under Order VIII Rule 1 of the Code of Civil Procedure for the Defendant to file the written statement only upon service of summons. Further, a permissible period of 120 days for filing of written statement is to be taken into account by the Waghmare 5/6 ::: Uploaded on - 25/04/2023 ::: Downloaded on - 17/06/2023 14:54:22 ::: 19,20.IAL.9650.23 in COMS.16.23.wt..doc Court, particularly when the reasons are satisfactory. 9 In the present case as aforementioned there are reasons for the delay given, not only of the time spent in collating documents in view of the cause of action having arisen in April, 2020 as well as the fact that employees who were in the know of these instances which form the subject matter of the Suit having left the service of the Applicant. There is also a case made out for the delay in view of parallel proceedings which concerned the same cause of action as the present Suit and which were pending in different Courts as well as in the Supreme Court. Accordingly, satisfactory reasons have been given for the delay and hence, there is no question of imposition of any costs. The relief sought for in the Interim Application is accordingly granted. Hence, the following order :
i) The delay of 46 days in filing written statement dated 31.03.2022 on behalf of Defendant No.1, is condoned.
ii) Registry shall accept the written statement dated 31.03.2022 filed on behalf of Defendant No.1.
iii) Interim Applications are disposed of.
(R.I. CHAGLA, J.)
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