For last many years Corporate Sector is facing problem with the long drawn litigation and illegitimate grounds taken by the Opposite party/defendants to drag the matter for years. The corporate sector has constantly been sending representations to the Government for working out the measures to curtail the time spent in litigation.
The Government of India looking at the demand of the corporate sector and to meet its international law commitments enacted an Act in January 2016 termed it as “Commercial Courts Act 2015” and further amended it in 2018 making amendments in the “Code of Civil Procedure” thereby giving a road map to the Judiciary for speedy disposal of the matters.
The Commercial Courts Act passed by legislation covers cases pertaining to transactions between merchants, bankers, financers & traders, contractual disputes, franchise & distributor agreements, Joint Ventures, Partnerships, Intellectual property and insurance agreement etc. The legislation has further introduced the “Pre-Institution Mediation and Settlement” and framed rules pertaining to the same.
The Hon’ble Supreme Court of India in a judgment titled as SCG Contracts India Pvt. Ltd. v. K.S. Chamankar Infrastructure Pvt. Ltd. & Ors. delivered on 12 February 2019 to carve upon the delaying techniques adopted by the opposite parties and to clarify the changes made in Civil Procedure Code with respect to commercial litigation covered by the Commercial Courts Act has clarified that the time for filing the Written Statement by opposite party is limited to 30 days which can be further extended to maximum by 90 days on giving reasonable reason for delay in filing the written statement and that the court does not have the power to further extend the time for filing the written statement. Previously the statute provided for discretion to the courts to condone the delay of even beyond 120 days in filing written statement even in matters of commercial disputes, but now it has been held that the said provision is mandatory in nature in cases covered under the Commercial Courts Act and the courts cannot extend the time of filing WS beyond the statutory period. After this the courts are bound to close the right of the opposite party for filing the written statement and the court has to proceed further in the matter which may be either passing the judgment or decree or as the Court may deem fit. The said law has been further affirmed by three Judge bench of the Hon’ble Supreme Court in the matter titled as Desh Raj Vs. Balkrishan delivered on 20 January 2020.
The Hon’ble Supreme Court in the Matter titled as Desh Raj Vs. Balkrishan has further clarified that the amended provisions of CPC will only be applicable on the Commercial disputes and all other non-commercial disputes fall within the ambit of the un-amended or original provisions of CPC. The relevant portion of the Judgment is as under:-
“However it would be again said that although the un-amended order VIII Rule I is directory it cannot be interpreted to bestow a free hand to any litigant or lawyer to file a WS at their own sweet will and/or to prolong the lis. The legislative objective behind prescription of time line under the CPC must be given due weightage so that the disputes are resolved in a time bound manner.”
Thus in our view the Supreme Court through this judgment had clarified the provision of Order VIII Rule I of the Code of Civil Procedure thereby limiting the time of 120 days for filing the written statement and judicial discretion for extending the time further has been curtailed and the courts are now bound to close the right of the opposite party for filing the Written Statement and has to proceed in the matter. It will help in speedy disposal of the matters.
