Karnataka High Court
M/S. American Road Technology And ... vs M G Mohan Kumar on 29 August, 2023
Author: S.G.Pandit
Bench: S.G.Pandit
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NC: 2023:KHC:30909
WP No. 6011 of 2020
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 29TH DAY OF AUGUST, 2023
BEFORE
THE HON'BLE MR JUSTICE S.G.PANDIT
WRIT PETITION NO. 6011 OF 2020 (GM-CPC)
BETWEEN:
1. M/S. AMERICAN ROAD TECHNOLOGY
AND SOLUTIONS PRIVATE LIMITED
A COMPANY REGISTERED UNDER
COMPANIES ACT 1956,
HAVING ITS REGISTERED OFFICE AT
NO.18, 2ND FLOOR, R.V.LAYOUT
KUMARA PARK WEST
BANGALORE -560 020
HEREIN REP. BY ITS
MANAGING DIRECTOR
MRS. BHANU PRABHA
KRISHNA HEBBAR
AGED ABOUT 48 YEARS.
2. MRS. BHANU PRABHA
Digitally signed by KRISHNA HEBBAR
GURURAJ D
AGED ABOUT 48 YEARS
Location: High
Court of Karnataka CEO AND DIRECTOR
M/S. AMERICAN ROAD,
TECHNOLOGY AND SOLUTIONS
PRIVATE LIMITED
R/AT AND HAVING ITS
REGISTERED OFFICE AT NO.139,
STERLING HEIGHTS, SUITE-302
INFANTRY ROAD,
BANGALORE- 560001.
...PETITIONERS
(BY SRI. AMIT A MANDGI, ADV.)
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NC: 2023:KHC:30909
WP No. 6011 of 2020
AND:
M G MOHAN KUMAR
S/O M.N. GUNDU RAO
AGED ABOUT 60 YEARS
R/AT FLAT NO.C 404
SKYLINE BEVERLY PARK
AMRUTHAHALLI MAIN ROAD,
BANGALORE- 560092.
...RESPONDENT
(BY SRI. SARAVANA S., ADV.)
THIS PETITION IS FILED UNDER ARTICLE 227 OF THE
CONSTITUTION OF INDIA, PRAYING TO SET ASIDE THE ORDER
DATED 04.01.2020 PASSED BY THE LXXXIII ADDITIONAL CITY
CIVIL AND SESSIONS JUDGE AT BENGALURU (CCH-84) IN
COM.O.S.NO.297/2018 THEREBY REJECTING THE I.A.NO.1/19
FILED BY THE PETITIONERS HEREIN U/S 151 OF THE CODE OF
CIVIL PROCEDURE 1908, WHICH IS PRODUCED HEREWITH AS
ANNEXURE-A.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING
IN 'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
Petitioners/defendants in Com.O.S.No.297/2018 on the file of 83rd Additional City Civil and Sessions Judge, Bengaluru are before this Court under Article 227 of the Constitution of India, against order passed on I.A.No.1 rejecting prayer to recall order dated 12.03.2019 taking "written statement and objection not filed". -3-
NC: 2023:KHC:30909 WP No. 6011 of 2020
2. Heard learned counsel Sri.Amit A Mandgi for petitioners and learned counsel Sri.Saravana S., for respondent. Perused the writ petition papers.
3. Learned counsel for the petitioners would submit that the petitioners/defendants on service of suit summons appeared on 28.08.2018 in O.S.No.297/2018. The suit initially was filed before the Additional City Civil and Sessions Judge, Bengaluru. On establishment of Commercial Court, the suit which is in the nature of commercial dispute was transferred to the Commercial Court i.e., 83rd Additional City Civil Judge, Bengaluru by order dated 08.02.2019 in terms of the notification dated 10.01.2019. After transfer to the Commercial Court, the suit was listed before the Commercial Court for the first time on 19.02.2019 on the said date, the Presiding Officer was on leave and the same was adjourned to 12.03.2019. On 12.03.2019, the order sheet would indicate that both the parties and the counsel absent and the Court noted that "written statement and objection not filed" and the -4- NC: 2023:KHC:30909 WP No. 6011 of 2020 case was adjourned to 20.04.2019. On 20.04.2019, the petitioners/defendants filed I.A.No.1/2019 under Section 151 of CPC along with written statement seeking permission to file written statement. Under impugned order dated 04.01.2020, I.A.No.1 filed under Section 151 of CPC seeking to recall the order dated 20.04.2019 taking "written statement and objection not filed" as well as seeking permission to file written statement is rejected.
4. Learned counsel Sri. Amit A. Mandgi for petitioner would submit that the trial Court committed an error in rejecting the application filed by the petitioner under Section 151 of CPC, praying to recall order "taking written statement and objection not filed" and seeking permission to file written statement. Learned counsel inviting attention of this Court to the entire order sheet would submit that initially, on appearance of the petitioners/defendants, the trial Judge directed the plaintiff to furnish the plaint and documents. It is also pointed out that the application under Section 148 of CPC was filed on -5- NC: 2023:KHC:30909 WP No. 6011 of 2020 28.11.2018 seeking extension of time for filing written statement and the same was allowed. Learned counsel referring to the proviso to Section 15 of the Commercial Courts Act, 2015 (for short "2015 Act") would submit that, Commercial Court on transfer of O.S.No.297/2018 failed to follow proviso to Section 15(4) of 2015 Act and to prescribe new timeline, within which, written statement shall be filed. In support of his contention, learned counsel would also place reliance on the judgment of the Hon'ble Apex Court in the case of RAJ PROCESS EQUIPMENTS AND SYSTEMS PVT. LTD. AND OTHERS v/s HONEST DERIVATIVES PVT. LTD., reported in MANU/SCOR/108561/2022 (Civil Appeal No.8089/2022). From the said judgment it is pointed out that in similar and identical fact situation, the Hon'ble Apex Court has observed that in a transferred suit i.e., the suit instituted before the normal Civil Court, principles laid down in SALEM ADVOCATE BAR ASSOCIATION v/s UNION OF INDIA, ((2005) 6 SCC 344) would be applicable. Thus, learned counsel would pray for allowing -6- NC: 2023:KHC:30909 WP No. 6011 of 2020 the writ petition and to permit the petitioners/defendants to file written statement.
5. Per contra, learned counsel Sri.Saravana S for respondent/plaintiff would submit that the suit was pending before the normal Civil Court and on establishment of Commercial Court under 2015 Act and as the suit involves commercial dispute, the same was transferred to the Commercial Court by order dated 08.02.2019 and from the said date of transfer, the petitioners had sufficient time or statutory time to file written statement or objections, but the petitioners/ defendants failed to file written statement within the time as provided under the proviso to Order VIII Rule 1 of CPC. Learned counsel would submit that the defendants are provided 30 days time from the date of service of suit summons to file written statement and if the defendants file application seeking extension of time to file written statement within 30 days for extension of time, upto maximum of 120 days to file written statement could be -7- NC: 2023:KHC:30909 WP No. 6011 of 2020 extended. It is submitted that the petitioners/defendants have failed to file any application seeking extension of time to file written statement within 30 days nor thereafter before expiry of 120 days. Therefore, he submits that the petitioners have forfeited their rights to file written statement in a Commercial suit. Learned counsel Sri.Saravana would submit that the principles laid down in SCG CONTRACTS INDIA PRIVATE LIMITED v/s K.S.CHMANKAR INFRASTRUCTURE LIMITED ((2019) 12 SCC 210) would squarely apply to the facts of the present case. Thus, he prays for dismissal of the writ petition.
6. On hearing the learned counsel for the parties and on perusal of the writ petition papers, the only point which falls for consideration is as to whether the impugned order rejecting I.A.No.1/2019 filed under Section 151 of CPC seeking leave to file written statement by setting aside the order taking "written statement and objection not filed"
requires interference?-8-
NC: 2023:KHC:30909 WP No. 6011 of 2020
7. The answer to the above point would be in the affirmative for the following reasons:
Admittedly, the suit of the respondent/plaintiff in O.S.No.297/2018 is for recovery of money along with interest and was filed before the normal Civil Court in the year 2018. On establishment of Commercial Court, in terms of the provisions of 2015 Act, the suit of the respondent/plaintiff was transferred to the Commercial Court by order dated 08.02.2019. Admittedly, the petitioners/defendants had entered appearance in the suit on 28.08.2018 and till transfer of the suit to Commercial Court, the petitioners/defendants had not filed written statement. But, they had sought time to file written statement, which was allowed. On transfer of suit to the Commercial Court for the first time, the suit was listed on 19.02.2019 and on the said date the Presiding Officer was on leave and the suit was adjourned to 12.03.2019 and on 12.03.2019, both the learned counsel and parties were absent. The Court noted that "written statement and -9- NC: 2023:KHC:30909 WP No. 6011 of 2020 objections not filed" and adjourned the suit to 20.04.2019.
On 20.04.2019, the petitioners/defendants filed I.A.No.1/2019 under Section 151 of CPC along with written statement seeking permission to file written statement, by recalling order dated 12.03.2019.
8. Order VIII Rule 1 of CPC relating to Commercial Court is amended and amended provision insofar as it relates to Commercial Court reads as follows:
"Commercial dispute of a Specified Value: in its application to any suit in respect of commercial dispute of a Specified Value, in Order VIII, in Rule 1, substitute the following proviso, namely:
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 such costs but which shall not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred twenty days from the from the date of service of summons, the
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NC: 2023:KHC:30909 WP No. 6011 of 2020 defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record.."
A reading of the above would abundantly makes it clear that, where the defendant fails to file written statement within a period of 30 days, he shall be allowed to file the same on such other day, as may be specified, for reasons to be recorded in writing, but which shall not be later than 120 days from the date of service of summons. Further, it makes it clear that if the written statement is not filed within 120 days, on expiry of 120 days from the date of service of summons, the defendant shall forfeit his right to file written statement and the Court shall not take the written statement on record.
9. In the instant case, on transfer of suit O.S.No.297/2018 from normal Civil Court to the Commercial Court by order dated 08.02.2019, the suit was listed on 19.02.2019 before the Commercial Court for the first time and the same was adjourned to 12.03.2019. On
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NC: 2023:KHC:30909 WP No. 6011 of 2020 12.03.2019, it was taken that "written statement and objection not filed." The petitioners/defendants admittedly have not filed written statement within 30 days from 19.02.2019, the date on which, the suit was listed for the fist time on transfer to the Commercial Court. It is also an admitted fact that the petitioners/defendants have not filed any application before the Commercial Court seeking extension of time to file written statement. But, on 20.04.2019, the petitioners/defendants filed I.A.No.1/2019 under Section 151 of CPC seeking leave to file written statement along with written statement.
10. Admittedly, I.A.No.1/2019 seeking leave to file written statement is filed within 120 days from the first date of listing the suit on transfer before the Commercial Court which date is to be taken as date of service of suit summons in a Commercial suit. In terms of the above extracted proviso, learned Commercial Court Judge has discretion to allow the defendants to file written statement within 120 days from the date of service of summons. In
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NC: 2023:KHC:30909 WP No. 6011 of 2020 the instant case, 19.02.2019, the date on which the first listing of the suit on transfer to the Commercial Court is to be taken as the date of service of suit summons. From 19.02.2019, the petitioners/defendants had maximum of 120 days time to file written statement.
11. Section 15(4) and proviso to sub-section (4) of Section 15 of 2015 Act reads as follows:
"(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.
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
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NC: 2023:KHC:30909 WP No. 6011 of 2020 period within which the written statement shall be filed."
The above proviso makes it abundantly clear that sub- rule(1) of Rule 1 of Order V of CPC would not apply to the transferred suit or application to the Commercial Court and the Commercial Court in its discretion shall prescribe a new time period within which, the written statement shall be filed. The Commercial Court failed to follow the mandate of proviso to sub-Section (4) of Section 15 of 2015 Act.
12. Proviso to sub-Rule (1) of Rule 1 of Order V of CPC which prescribes time line for filing written statement would not apply to the commercial suits transferred from normal Civil Courts to the Commercial Courts in terms of proviso to sub-Section (4) of Section 15 of 2015 Act. The amendment to proviso to Order VIII Rule 1 of CPC insofar as Commercial Courts Act is concerned, it provides discretion to the Commercial Court Judge to extend time up to 120 days to file written statement. The learned
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NC: 2023:KHC:30909 WP No. 6011 of 2020 Commercial Court Judge has failed to exercise his discretion in the matter of taking on record the written statement in the present case in proper perspective.
13. It is settled position of law that in terms of SCG CONTRACTORS INDIA PRIVATE LIMITED (supra), in the normal course in a commercial suit, if the defendants fail to file written statement within 120 days, defendants would forfeit their right to file written statement. But the same would not be applicable to the facts of the present case and 120 days to file written statement in the present case is to be counted from 19.02.2019, the first date of listing of suit on transfer to the Commercial Court. In the above circumstances, from 12.03.2019, the date of which the Commercial Court noted that "written statement and objection not filed", the statutory period of 120 days had not lapsed for filing written statement.
14. In the peculiar fact situation of this case, the decision relied upon by the learned counsel for the petitioner would have no application.
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15. For the reasons recorded above, the writ petition is allowed. The impugned order dated 04.01.2020 in Com.O.S.No.297/2018 on the file of the 83rd Additional City Civil and Sessions Judge, Bangalore is set aside. I.A.No.1/2019 seeking leave to file written statement is allowed, on payment of cost of Rs.50,000/- payable to the State Legal Services Authority.
The petitioners/defendants shall pay cost within a week and produce the receipt for having paid the cost before the Commercial Court, on the next date of hearing.
Sd/-
JUDGE MPK CT:bms List No.: 1 Sl No.: 66