Code of Civil Procedure, 1908 (As amended in the wake of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 coming into force on 23-10-2015):
Or. VIII, r. 1, proviso and r. 10, proviso, Or. V, r. 1, sub rule (1), second proviso – Written statement – Procedure when party fails to present written statement called for by court – On facts, in a commercial suit, failure of defendant No.1 to file written statement within 120 days from the date of service of summons – Meanwhile, filing of application under Or. VII, r. 11 – Rejected by order dated 05.12.2017 – Thereafter, defendant no. 1 sought time for filing the written statement – Extension of time till 15.12.2017, subject to defendant paying cost – Pursuant thereto, written statement filed on 15.12.2017 – Thereafter, belated application filed averring that in view of the amendments in CPC, written statement could not be taken on record since 120 days had elapsed from the date of service of summons of the suit – High Court allowed the written statement to be taken on record even though order dated 05.12.2017 had become final and provisions of law were amended – On appeal, held: Proviso in Or. VIII r. 10 states that the Court has no further power to extend the time beyond the period of 120 days – 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 – All this points to the fact that the earlier law on the filing of written statement under Or. VIII, r. 1 has now been set at naught – Clear, definite and mandatory provisions of Or. V r/w Or. VIII, r. 1 and 10 cannot be circumvented by recourse to the inherent power u/s. 151 – Thus, the 05.12.2017 order cannot be sustained – Second order dated 24.09.2018 is also set aside – Even assuming that the 05.12.2017 order is final, res judicata cannot stand in the way of an erroneous interpretation of a statutory prohibition – Thus, the written statement of defendant no. 1 to be taken off the record – Res judicata.
Allowing the appeal, the Court
HELD: 1.1 A perusal of the amendments made in the wake of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 to Code of Civil Procedure-Or. VIII, r. 1 and 10 proviso, Or. V, r. 1 sub rule (1) second proviso, 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. 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 VIII Rule 10 also adding that the Court has no further power to extend the time beyond this period of 120 days. Given the consequence of non-filing of written statement, the amended provisions of the CPC will have to be held to be mandatory. The consequence of forfeiting a right to file the written statement; non-extension of any further time; and the fact that the Court shall not allow the written statement to be taken on record all points to the fact that the earlier law on Order VIII Rule 1 on the filing of written statement under Order VIII Rule 1 has now been set at naught. The clear, definite and mandatory provisions of Order V read with Order VIII Rule 1 and 10 cannot be circumvented by recourse to the inherent power under Section 151 to do the opposite of what is stated therein. Therefore, the 05.12.2017 order which applies in the face of the amendments made to the CPC cannot be sustained. [Para 8, 10, 11, 16, 17][1056-B-C; 1057-B-C-D; 1058-F-G]
1.2 An issue of law which arises between the same parties in a subsequent suit or proceeding is not res judicata if, by an erroneous decision given on a statutory prohibition in the former suit or proceeding, the statutory prohibition is not given effect to. This is despite the fact that the matter in issue between the parties may be the same as that directly and substantially in issue in the previous suit or proceeding. This is for the reason that in such cases, the rights of the parties are not the only matter for consideration (as is the case of an erroneous interpretation of a statute inter parties), as the public policy contained in the statutory prohibition cannot be set at naught. The said is applicable to the facts of the instant case, as even assuming that the 05.12.2017 order is final, res judicata cannot stand in the way of an erroneous interpretation of a statutory prohibition. Therefore, the second order dated 24.09.2018 is set aside. The written statement of defendant no. 1 must be taken off the record. [Paras 18, 19][1059-B-C; F]
Canara Bank v. N.G. Subbaraya Setty and Anr. AIR 2018 SC 3395 : [2018] SCR 884 – relied on.
Oku Tech Private Limited v. Sangeet Agarwal & Ors. dt 11.08.2016 in CS (OS) No. 3390/2015 – approved.
State of Bihar and Others v. Bihar Rajya Bhumi Vikas Bank Samiti (2018) 9 SCC 472 : [2018] 7 SCR 1147 ; Bhanu Kumar Jain v. Archana Kumar and Another (2005) 1 SCC 787 : [2004] 6 Suppl. SCR 1104 ; Shaikh Salim Haji Abdul Khayumsab v. Kumar and Others (2006) 1 SCC 46 : [2005] 5 Suppl. SCR 349 ; R.K. Roja v. U.S. Rayudu and Another [2016] SCR 221 ; Kailash v. Nanhku (2005) 4 SCC 480 : [2005] 3 SCR 289 ; Salem Advocate Bar Association v. Union of India (2005) 6 SCC 344 : [2005] 1 Suppl. SCR 929 ; State v. N.S. Gnaneswaran (2013) 3 SCC 594 ; Manohar Lal Chopra v. Rai Bahadur Rao Raja Seth Hiralal [1962] Suppl 1 SCR 450 ; Maja Cosmetics v. Oasis Commercial Pvt. Ltd. 2018 SCC Online Del 6698 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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