Kerala High Court
M/S Capital Retreat Private Limited vs Gopakumar B. Nair on 26 March, 2025
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OPC 1409/24
2025:KER:26418
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE BASANT BALAJI
WEDNESDAY, THE 26TH DAY OF MARCH 2025 / 5TH CHAITHRA, 1947
OP(C) NO. 1409 OF 2024
CS NO.73 OF 2021 OF ASSISTANT SESSIONS COURT/PRINCIPAL SUB COURT /
COMMERCIAL COURT, THIRUVANANTHAPURAM
PETITIONER/S:
M/S CAPITAL RETREAT PRIVATE LIMITED, AGED 73 YEARS, TC
31/527 (1), CHAKKAI, PETTAH, THIRUVANANTHAPURAM, REPRESENTED
BY ITS CHAIRMAN RAJMOHAN, PIN - 695024
BY ADVS.THEJAN RAJ
E.ADITHYAN
INDRAJITH.I
R.T.PRADEEP
M.BINDUDAS(K/523/2010)
NIRANJAN T. PRADEEP(K/001073/2024)
RESPONDENT/S:
GOPAKUMAR B. NAIR, AGED 57 YEARS, S/O LATE BALAKRISHNAN
NAIR, 5-A, SKYLINE PLAZA APARTMENTS, VELLAYAMBALAM,
SASTHAMANGALAM P.O, THIRUVANATHAPURAM ., PIN - 695010
BY ADVS.C.S.MANU, DILU JOSEPH(D-125)
C.A.ANUPAMAN(A-503), T.B.SIVAPRASAD(K/17/2007)
C.Y.VIJAY KUMAR(K/152/2014)
NEETHU.K.SHAJI(K/148/2012), MANJU E.R.(K/000401/2016)
ANANDHU SATHEESH(K/613/2020)
ALINT JOSEPH(K/505/2020), PAUL JOSE(K/000862/2020)
DAINY DAVIS(K/001135/2024)
THIS OP (CIVIL) HAVING COME UP FOR ADMISSION ON 19.02.2025, THE COURT
ON 26.3.2025 DELIVERED THE FOLLOWING:
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OPC 1409/24
2025:KER:26418
C.R.
JUDGMENT
(Dated this the 26th day of March 2025) The question that arise for consideration in this Original Petition is whether the defendant can forfeit the right to file a written statement, if the same is not filed within 120 days from the date of service of summons.
2. The petitioner is the defendant in C.S.No.73 of 2021 on the files of Principal Sub Court, Thiruvananthapuram. The respondent filed the suit under Section 26 read with Order 37 Rules 1 and 2 CPC read with Section 6 of the Commercial Courts Act, 2015 (for short 'the C.C.Act'), for the realisation of an amount of Rs.5,03,79,000/- from the defendant, together with future interest at the rate of 18% p.a., from the date of institution of the suit till realisation. On receipt of summons, the petitioner entered appearance and sought leave of the court to defend the 3 OPC 1409/24 2025:KER:26418 suit under Order 37 Rule 3(5) CPC as I.A.No.8 of 2021. By order dated 10.3.2022, leave was granted to the defendant, who was directed to file a written statement within 10 days. On 25.3.2022, the defendant sought time for filing a written statement, which was refused by the court and the defendant was set ex parte.
3. Meanwhile, the respondent/plaintiff challenged the order in I.A. No.8 of 2021 before this court, in O.P.(C) No.1234 of 2022 and the entire proceedings were stayed till the O.P. was dismissed on 25.7.2023. Immediately, a petition was filed by the petitioner to set aside the ex-parte order, along with a written statement and a petition to accept the same. An application to condone the delay in setting aside the ex-parte order, an application for setting aside the ex-parte order, and to accept the written statement were filed as I.A.Nos.15, 16 and 17 of 2023, respectively. The court below heard all the I.As together and 4 OPC 1409/24 2025:KER:26418 dismissed as per Ext.P1 common order dated 16.2.2024. The petitioner has filed this Original Petition to set aside Ext.P1 and for a direction to the trial court to accept the written statement filed by the petitioner.
4. The reasoning given by the trial court is that as per the amended provision of Order 8 Rule 1 CPC, a written statement in a commercial suit is to be filed within 30 days from the date of service of summons on him, and if the defendant fails to file the written statement within the said period of 30 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 cost, as the court deems fit, which shall not be later than 120 days from the date of service of summons.
5. The court has directed the defendant to file a written statement within 10 days from 10.3.2022, and since the written 5 OPC 1409/24 2025:KER:26418 statement was not filed, the defendant was set ex-parte on 25.3.2022 as the 10 days' time expired on 24.3.2022. It was also found that under proviso to Order 8 Rule 1, the amendment is brought into the said Rule under Section 16 of the C.C. Act, the defendant shall forfeit the right to file the written statement, if it is not filed within 120 days from the date of service of summons and the court shall not allow the written statement to be taken on record.
6. Heard Sri.R T Pradeep, the counsel for the petitioner and Shri.C.S Manu for the respondent.
7. The counsel for the petitioner argued that the present suit, C.S. No.73 of 2021, is filed under Order 37 Rule 1 and 2. Order 37 deals with the summary procedure. Under Rule 2(2), once the suit is filed, the summons of the suit shall be sent to the defendant in Form No.4 in Appendix B or in such other form, as 6 OPC 1409/24 2025:KER:26418 may, from time to time, be prescribed. Once the defendant enters appearance, the notice of appearance is to be given to the plaintiff's pleader, and after the defendant enters appearance, the plaintiff shall thereafter serve on the defendant, a summons for judgment in Form No.4-A in Appendix B or such other form, as may be prescribed, from time to time, returnable not less than 10 days from the date of service, supported by an affidavit verifying the cause of action and the amount claimed and stating that in his belief, there is no defence to the suit.
8. After the receipt of said summons in Form No.4-A in Appendix B, within 10 days thereafter, the defendant has to file an affidavit or otherwise, disclosing that he shall be deemed sufficient to entitle him to defend, apply for leave to defend the suit and the court has to grant the leave unconditionally or upon such terms, as may appear to the court or Judge to be just. 7 OPC 1409/24
2025:KER:26418 Therefore, he contends that the provisions of either Order 5 or Order 8 CPC, do not apply to a commercial summary suit.
9. It is also argued that the defendant has no right to file a written statement unless and until the court grants leave to defend the suit. The petitioner was served with 2 summons (i) form 4 in Appendix B and (ii) form 4-A in Appendix B, and therefore, the time limit of 120 days for filing the written statement from the date of service of summons as fixed in Order 5 and Order 8 CPC, cannot hold good as the leave to defend the suit was granted to the petitioner only after 120 days from service of notice in Form No.4 Moreover, the respondent himself has challenged the Order in I.A.No.8 of 2021, allowing leave to defend the suit by the petitioner in O.P.(C) No.1234 of 2022 and the same was dismissed. In such circumstances, I.A.Nos.15, 16 and 17 of 2023 were filed, which ended in dismissal by Ext.P1. 8 OPC 1409/24
2025:KER:26418
10. He relied on an order dated 8.4.2021 passed by the Bombay High Court in Interim Application (L) No.5323 of 2020 in Commercial Summary Suit No.778 of 2017 (M/s.Sandy Ltd. v. M/s.Diligent Media Corporation Ltd.), wherein it was held that the ceiling limit of 120 days fixed for filing a written statement under proviso to Order 5 Rule 1 and Order 8 Rule 1 and Rule 10 CPC do not apply to commercial summary suits, after the coming of operation of the C.C. Act. Reliance was also placed on the judgment of the Delhi High Court in Bharat Singh v. Karan Singh and others (2025 SCC Online Delhi 691).
11. The counsel for the respondent, Sri.C.S.Manu, on the other hand, placed reliance on S.C.G Contracts India Pvt. Ltd. v. K. S. Chamankar Infrastructure Pvt. Ltd. and others [(2019) 12 SCC 210], and argued that after the period of 120 days from the service of summons on the defendant under Order 5 Rule 9 OPC 1409/24 2025:KER:26418 1 and Order 8 Rule 1 CPC, the defendant forfeits the right to file written statement and no written statement can be taken on record. According to him, the suit was filed on 15.3.2021 as C.S.No. 73 of 2021, the summons was ordered on 23.3.2021 and served on the same day. The defendant entered appearance on 9.4.2021. The 30 days provided for filing a written statement under Order 5 and Order 8 expired on 10.4.2022, taking note of the fact that summons was served on 10.3.2022. The extended period of 120 days from the date of service of summons expired on 8.7.2022.
12. On receipt of the summons in Form No.4, the defendant entered appearance, but with a delay. The Commercial Court condoned the delay in entering appearance on 21.10.2021. The application for leave to defend on receipt of summons in Form No.4-A in Appendix B was filed on 29.9.2021, and the court granted leave on 10.3.2022. While granting leave, the court fixed 10 OPC 1409/24 2025:KER:26418 a new timeline and directed the defendant to file a written statement within 2 weeks from 10.3.2022. The said 2 weeks expired on 24.3.2022, and on the very next day, since no written statement was filed, the defendant was set ex-parte as there was no representation, on 25.3.2022. Even if 120 days is taken into account from the date of granting of leave as per the new timeline, the time limit expired on 8.7.2022. Even on that day, no written statement was filed by the defendant.
13. O.P.No.1234 of 2022 challenging the grant of leave to defend the suit was filed only on 12.7.2022, and the same was dismissed on 25.7.2023. The present petition filed to accept the written statement, with a petition to condone delay and to set aside ex parte order, is only on 15.9.2023. Thus, the court below is fully justified in dismissing the application as the present I.A s are filed with inordinate delay.
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14. As mentioned earlier, Order 37 CPC deals with summary procedure. It is not in dispute that a commercial dispute filed before the commercial court also can be filed under the said order. A perusal of Ext.P2 plaint would show that the suit is filed under Section 26 and Order 37 Rules 1 and 2 CPC read with Section 6 of the C.C. Act. A separate procedure is prescribed under Order 37 CPC for Institution of Summary Suits and Procedure for Appearance of Defendant. When a suit is filed under the said order, Rule 2(2) prescribes that the summons of the suit shall be in form No.4 in Appendix B or such other form as may, from time to time, be prescribed. Rule 3(3) directs the defendant on entering appearance to give notice of appearance to the plaintiff's pleader or to the plaintiff, if he sues in person either by notice delivered/sent or by pre paid letter to the plaintiff' pleader or the plaintiff, as the case may be. Rule 4 directs that if 12 OPC 1409/24 2025:KER:26418 the defendant enters appearance, the plaintiff shall thereafter serve on the defendant a summons for judgment in form No.4-A in appendix B or such other form, as may be prescribed from time to time, returnable not less than 10 days, from the date of service, supported by an affidavit verifying the cause of action and the amount claimed and stating that in his belief, there is no defence to the suit. According to Rule 5, the defendant may, at any time within 10 days from the date of service of the judgment, apply on such summons for leave to defend the suit and the court may grant leave to defend unconditionally or upon such terms, as it may appear to the court or Judge to be just.
15. In ordinary suits, if one reads Order 5 Rule 1 CPC, the time granted for the defendant to file a written statement is 30 days from the date of summons on the defendant, which can be extended to a period not later than 90 days, from the date of 13 OPC 1409/24 2025:KER:26418 service of summons for reasons to be recorded in writing. The same is also stated in Order 8 Rule 1 CPC.
16. But, as mentioned earlier, as far as the commercial suit is concerned, as per the amendment to the C.C. Act, as provided under Section 16, by incorporating proviso to Order 5 and Order 8, the period of 30 days can be extended for a period not less than 120 days from the date of service of summons. But the defendant shall forfeit the right to file a written statement if the written statement is not filed within 120 days from the date of service of the summons, and the court shall not accept the written statement on record.
17. In this case, the present commercial suit is filed under Order 37 CPC under the summary procedure. As far as the commercial suit filed under Order 37 is concerned, the defendant's right to defend the suit arises only on the grant of 14 OPC 1409/24 2025:KER:26418 leave on receipt of summons under Form 4A Appendix B under Order 37 Rule 3(5) CPC. As mentioned earlier, on receipt of the application in Form 4A, the petitioner entered appearance with a delay, but the said delay was condoned on 21.10.2021, and the application for leave to defend as I.A. No.8 of 2021 was filed on 29.9.2021, and the leave was granted on 10.3.2022. The Commercial Court, while granting leave, fixed a new timeline and granted 2 weeks from 10.3.2022 for filing written statement. The defendant did not adhere to the said timeline, and thus, the time granted expired on 24.3.2022, and the defendant was set ex-parte on 25.3.2022. As far as the commercial suit filed under Order 37 is concerned, the right of a defendant to defend the suit arises only on grant of leave, which is admittedly on 10.3.2022. So, going by proviso to Order 5 Rule 1 and Order 8 Rule 1, the defendant can file a written statement within 30 days from the date of 15 OPC 1409/24 2025:KER:26418 granting of leave, which can be extended by the court for reasons to be recorded in writing, but it shall not be later than 120 days from the date of grant of leave. So, the 120 days would expire on 8.7.2022 as the leave was granted on 10.3.2022. A proviso is added to Order 8 Rule 10 CPC by an operation of Section 16 of the C.C. Act, which provides that no court shall make an order to extend the time provided under Rule 1 of this Order for filing of the written statement. Thus, it can be concluded that the 120 days prescribed for filing the written statement shall run from the date of grant of leave on 10.3.2022, and it expired on 8.7.2022.
18. The contention raised by the counsel for the petitioner that the plaintiff filed an O.P.(C) before this court challenging the grant of leave and the same was dismissed on 25.07.2023 and therefore, the written statement has to be accepted after condoning the delay, will not stand, as O.P.(C) No.1234 of 2022 16 OPC 1409/24 2025:KER:26418 was filed by the plaintiff only on 12.7.2022 i.e, after the expiry of 120 days for filing written statement, which got expired on 8.7.2022. The present applications, I.A.Nos.15, 16 and 17 of 2023, were filed on 15.9.2023, which is 51 days after the dismissal of O.P.(C) by this court. Thus, it can be safely concluded that the trial court is fully justified in dismissing the application to accept the written statement. No written statement was filed within 120 days from the grant of leave to defend the suit, which is admittedly on 10.3.2022.
19. I.A.No.16 of 2023 is filed under Order 9 Rule 9 CPC. The application seeking permission to grant leave to defend the suit as I.A. No.8 of 2021, was allowed on 10.3.2022 and directed the petitioner to file written statement within 2 weeks. The written statement was not filed in time. Therefore, the petitioner was made ex-parte. The petitioner thereafter, filed O.P.(C) 17 OPC 1409/24 2025:KER:26418 No.1234 of 2022 before this court and entire proceedings were stayed and it was dismissed on 25.7.2023. It is after the dismissal, on 15.9.2023 the present application was filed to set aside ex- parte order. By that time, there occurred a substantial delay. Therefore, I.A.No.15 of 2023 was filed. The commercial court held that since the written statement was filed after a period of 120 days, the same cannot be accepted and the defendant was set ex-parte.
20. On a perusal of the affidavit in support of the petition to condone the delay in filing the petition to set aside the ex-parte order and the petition to set aside ex-parte order, I am satisfied that the delay in filing the petition to set aside ex-parte can be allowed as sufficient cause is shown. Consequently, I.A.No.16 of 2023 is also allowed.
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21. While the amendment was brought into the CPC under provisos to Order 5 and Order 8, under section 16 of the C.C. Act, the intention of the legislature was a speedy disposal of commercial suit, and it is keeping the said aspect in mind, it was specifically provided that the defendant shall forfeit the right to file written statement after 120 days from the date of service of summons and the court shall not allow the written statement to be taken on record. On an overall appreciation of the facts and circumstances of the case and taking note of timelines right from the suit till the filing of petitions, which are dismissed as per Ext.P1, I am of the opinion that interference is warranted with Ext.P1 common order dated 16.2.2024, to the extent of dismissing I.A.Nos.15 and 16 and the order in I.A.No.17 of 2023 is upheld. Therefore, the Original Petition stands disposed of, as follows:
i. I.A. No.15 of 2023 is allowed 19 OPC 1409/24 2025:KER:26418 ii. I.A.No.16 of 2023 is allowed; and iii. The order in I.A. No.17 of 2023 is sustained.
It is also clarified that the defendant shall be permitted to participate in the trial and cross-examine the plaintiff.
Sd/-
BASANT BALAJI JUDGE dl/ 20 OPC 1409/24 2025:KER:26418 APPENDIX OF OP(C) 1409/2024 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE COMMON ORDER DATED 16.02.2024 IN I.A NO.15, I.A NO 16 AND I.A NO. 17 OF 2023 RENDERED BY THE HON'BLE PRINCIPAL SUBORDINATE JUDGES COURT, THIRUVANANTHAPURAM Exhibit P2 A TRUE COPY OF THE C.S NO. 73 OF 2021 DATED 19/3/2021 OF THE COMMERCIAL COURT,THIRUVANANTHAPURAM RESPONDENT EXHIBITS Exhibit R1(a) True copy of the Order dated 3-9-2021 in I.A No.4 of 2021 in C.S No.73 of 2021 passed by the Commercial Court, Thiruvananthapuram Exhibit R1(b) True copy of the order dated 10-3-2022 in I.A No.8 of 2021 in C.S. No.73 of 2021 passed by the Commercial Court, Thiruvananthapuram PETITIONER EXHIBITS Exhibit P3 THE TRUE COPY OF THE DELAY PETITION IN CS 73/2021 OF THE PRINCIPAL SUB COURT (COMMERCIAL COURT) THIRUVANANTHAPURAM Exhibit P4 THE TRUE COPY OF THE SETASIDE PETITION IN CS 73/2021 OF THE PRINCIPAL SUB COURT (COMMERCIAL COURT) THIRUVANANTHAPURAM Exhibit P5 THE TRUE COPY OF THE ACCEPT WRITTEN STATEMENT PETITION IN CS 73/2021 OF THE PRINCIPAL SUB COURT (COMMERCIAL COURT) THIRUVANANTHAPURAM Exhibit P6 THE TRUE COPY OF THE FINAL JUDGMENT IN OPC 1234 OF 2024 DATED 13/6/2024 OF THE HON'BLE COURT Exhibit P7 THE TRUE COPY OF THE WRITTEN STATEMENT FILED BY THE DEFENDANT IN CS 73/2021 OF THE PRINCIPAL SUB COURT (COMMERCIAL COURT) THIRUVANANTHAPURAM