DESH RAJ versus BALKISHAN (D) THROUGH PROPOSED LR MS. ROHINI on 20 January 2020

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[2020] 5 S.C.R. 14

SUPREME COURT REPORTS

[2020] 5 S.C.R.

A

DESH RAJ

v.

BALKISHAN (D) THROUGH PROPOSED LR MS. ROHINI

(Civil Appeal No. 433 of 2020)

B

JANUARY 20, 2020

[S. A. BOBDE, CJI, B.R. GAVAI AND SURYA KANT, JJ.]

Code of Civil Procedure, 1908 – Or. VIII, r. 1 – Timeline forfiling written statement in non-commercial disputes – Agreement toCsell entered on 17.03.2017 between the appellant and therespondent, who are brothers, for sale of one floor of the ancestralproperty for Rs. 7.5 lakhs – Rs.1 lakh paid as earnest money tothe appellant – Agreement not honoured – Respondent filed suitinter alia for specific performance – Appellant’s opportunity of filingwritten statement was closed and defence struck off owing toDrepeated delays and non-adherence of deadlines – High Courtsummarily dismissed the petition relying upon it’s order in one OkuTech case which was rendered in the context of a commercialdispute qua Or.VIII, r.1 as amended by the Commercial Courts Act,2015 – Held: Counsel for the respondent has not contested theEnon-commercial nature of the dispute – Dispute does not fall withinthe parameters specified u/s.2(c) of the 2015 Act and in particularsub-clause (vii), as the immovable property here is not of a naturewhich is “used exclusively in trade or commerce”– High Courtoverlooked the nature of the dispute and mistakenly applied theratio of a case rendered in light of modified version of the CPCFapplicable only to commercial disputes – Further, numerousopportunities were accorded to the appellant – He was served on01.05.2017 – It was only on 02.11.2017, after delay of 95 dayspost the maximum extendable period under the Proviso of Or. VIII,r.1 that the appellant claimed to have filed his written statement –GOnly defence taken to the repeated and blatant lapses is that theappellant’s counsel was not turning up – Appellant is seekingcondonation in a casual manner – This ought not to be permittedor encouraged – Although the unamended Or.VIII, r.1 is directory,it cannot be interpreted to bestow free hand to any litigant/lawyerHto file written statement at their own sweet-will– Legislative objective behind prescription of timelines under the CPC must begiven due weightage so that disputes are resolved in time-boundmanner – Appellant failed to give or even attempt to proffer anycogent reason for the delay, though he is right that the High Courterroneously relied upon the ratio of Oku Tech – Lenient view takenin the unique circumstances of the case – Discretion exercised nota precedent – Written statement filed by the appellant on02.11.2017 (as claimed), be taken on record with a copy to counselfor the respondent within one week from today, subject to paymentof costs of Rs.25,000/- to the respondent – Orders of the courtsbelow set aside – Commercial Courts Act, 2015 – ss.2(c) and 16.

Commercial Courts Act, 2015 – ss.2(c) and 16 – Amendmentof CPC in its application to commercial disputes – Held: Postcoming into force of the said Act, there are two regimes of civilprocedure wherein commercial disputes [as defined u/s.2(c) of thesaid Act] are governed by the CPC as amended by s.16 of the saidAct; all other non-commercial disputes fall within the ambit of theunamended/original provisions of CPC – Code of Civil Procedure,1908 – Or. VIII, r. 1.

Disposing of the appeal, the Court

Conclusion

Disposing of the appeal, the Court

HELD: 1.1 The Commercial Courts Act, 2015 throughSection 16 has amended the CPC in its application tocommercial disputes. Hence, it is clear that post coming intoforce of the aforesaid Act, there are two regimes of civilprocedure. Whereas commercial disputes [as defined underSection 2(c) of the Commercial Courts Act, 2015] are governedby the CPC as amended by Section 16 of the said Act; all othernon-commercial disputes fall within the ambit of the unamended(or original) provisions of CPC. Counsel for respondent has notcontested the non-commercial nature of the dispute, and evenindependently the Court is satisfied that the dispute does notfall within the parameters specified under Section 2(c) of theCommercial Courts Act, 2015 and in particular sub-clause (vii),as the immovable property here is not of a nature which is “usedexclusively in trade or commerce”. Hence, the appellant is correctin contending that the High Court overlooked the nature of thedispute and mistakenly applied the ratio of a case rendered in AB

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Alight of a modified version of the Code of Civil Procedure, whichwould only be applicable to commercial disputes. [Paras 11, 12& 14] [20-D-E; 21-A-B; 21-E-H]

Atcom Technologies Ltd. v. Y.A. Chunawala and Co.(2018) 6 SCC 639 – relied on.

B

1.2 Although the unamended Order VIII Rule 1 of CPCis directory, it cannot be interpreted to bestow a free hand onany litigant or lawyer to file written statement at their own sweet-will and/or to prolong the lis. The legislative objective behindprescription of timelines under the CPC must be given dueCweightage so that the disputes are resolved in a time-boundmanner. Inherent discretion of Courts, like the ability to condonedelays under Order VIII Rule 1 is a fairly defined concept andits contours have been shaped through judicial decisions overthe ages. Illustratively, extreme hardship or delays occurringDdue to factors beyond control of parties despite proactivediligence, may be just and equitable instances for condonationof delay. Numerous opportunities had been accorded to theappellant. He was served on 01.05.2017 and entered appearancethrough counsel on 15.05.2017. As per Order VIII Rule I of CPC,Ethe appellant ideally ought to have filed his written statementby 31.05.2017; and at the very latest by 30.07.2017. In additionto two separate deadlines for filing of the written statementwithin the 90-day timeframe prescribed by the ‘original’ OrderVIII Rule 1, the Civil Court even post expiry of the 90-dayperiod again gave one last and final opportunity on 18.09.2017Fsubject to payment of costs of Rs 3,000. None of these deadlineswere complied with. Even on 11.10.2017, when the Court finallyclosed the appellant’s ability to file written statement and struck-off his defence from the record, no attempt was made to complywith the process of law. It was only on 02.11.2017, after a delayGof 95 days post the maximum extendable period under theProviso of Order VIII Rule 1, CPC that the appellant claimedto have filed his written statement. Curiously however, even bythe next hearing on 03.11.2017, the appellant had failed toprovide a copy of the written statement to the respondent asHhad been noted by the Civil Court. [Paras 16-18] [22-A-G]

1.3 The only defence taken to these repeated and blatantlapses is that the appellant’s counsel was not turning up. Noattempt has been made to even proffer a reasoned justificationor explanation, and it is clear that appellant is seekingcondonation in a casual manner. This ought not to be permittedor encouraged. Nothing prevented the appellant from filing thewritten statement through counsel or in person. He has, thus,failed to give any cogent reason for the delay and is unable tosatisfy due diligence on his part though he is right in hissubmission that the High Court erroneously relied upon the ratioof Oku Tech. Having held so, there could be no escape but todismiss this appeal. However, taking a lenient view given theunique circumstances of the case, and without laying down thediscretion being exercised hereinafter, as a precedent, it isdirected that the written statement filed by the appellant on02.11.2017 (as claimed), be taken on record with a copy tocounsel for the respondent within one week from today andfurther subject to payment of costs of Rs. 25,000/- to therespondent. The orders of the courts below are thus set asideand the appeal is disposed of in the above terms. [Paras 19,21, 23] [22-G-H; 23-A-E]

Oku Tech Pvt Ltd v. Sangeet Agarwal and Others(2016) SCC OnLine Del 6601; Salem Advocate BarAssociation, T.N. v. Union of India (2005) 6 SCC344 : [2005] 1 Suppl. SCR 929; M/s SCG ContractsIndia Pvt. Ltd. v. KS Chamankar Infrastructure Pvt. Ltd.& Ors. AIR 2019 SC 2691 – referred to.

Case Law Reference

[2005] 1 Suppl. SCR 929referred toPara 8AIR 2019 SC 2691referred toPara 13(2018) 6 SCC 639relied onPara 14

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 433of 2020.

From the Judgment and Order dated 26.11.2018 of the HighCourt of Delhi at New Delhi in CM(M) No. 1370 of 2018.

Anilendra Pandey, Adv. for the Appellant.

Ms. Aparna Jha, Adv. for the Respondent.

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AThe following Judgment of the Court was delivered:JUDGMENT

1. Leave granted.

2. This Civil Appeal is directed against order dated 26.11.2018Bpassed by the Delhi High Court whereby appellant’s revision petitionagainst the order of the Civil Court which closed his right to file writtenstatement under Order VIII Rule 1 of the Code of Civil Procedure,1908 (hereinafter “CPC”) and struck-off his defence owing to repeateddelays and non-adherence of prescribed deadlines, has been dismissed.

FACTSC

3. The appellant and the respondent are brothers and own onefloor each of ancestral property bearing No. 142 in Devli Village, Delhi.The ground floor was possessed and owned by the respondent, whereasthe first floor was in the name of the appellant.

D

D4. It has been claimed that in February 2017, the respondentapproached the appellant offering to purchase the first floor of theancestral property. Subsequently, an agreement to sell was entered intobetween the parties on 17.03.2017 for total consideration of Rs 7.5lakhs, of which an amount of Rs 1 lakh was paid as earnest money tothe appellant. This agreement was subsequently not honoured and aElegal notice was served upon the appellant by the respondent on13.04.2017, calling upon him to accept consideration and perform hispart of the contract.

5. Claiming that the appellant was attempting to sell the suitproperty to third parties, the respondent later approached the Civil CourtFpraying for a decree of specific performance of the agreement to selldated 17.03.2017 by directing the appellant to receive the balance saleconsideration and execute/register the sale deed in favour of therespondent. Additionally, the respondent sought to permanently injunctthe appellant from alienating the property in favour of any third party.GAlternatively, recovery of damages of Rs 2 lakhs with pendent lite andfuture interest @ 18% per annum was sought by the respondent.

6. The appellant was served on 01.05.2017, and he appearedthrough counsel on 15.05.2017 wherein the Civil Court granted theappellant 30 days to file his written statement. On 17.07.2017, notingHthat no written statement had been filed till then, the Court granted the appellant a final opportunity of two weeks to file his written statement.On 18.09.2017, the Court observed that despite the last opportunityhaving been accorded more than two months ago, no written statementhad been filed. Nevertheless, the Court granted another final opportunity,subject to payment of Rs 3,000 costs and the matter was posted for11.10.2017. On this date, appellant sought multiple pass overs but hisCounsel did not appear before the Court. After noticing that despiteseveral opportunities (including one beyond the maximum period of 90days) the appellant had failed to file any written statement or depositcosts and that the matter could not be adjourned repeatedly, the CivilCourt thus closed the appellant’s opportunity of filing written statementand struck off his defence. Even on the next hearing on 03.11.2017,the appellant’s Counsel did not appear or supply a copy of the writtenstatement to the respondent, as noted in the Trial Court’s daily order.

7. The aggrieved appellant approached the High Court in revision,which noted how he had been granted repeated opportunities and yetthe written statement was not filed within 120 days of notice. Relyingupon the order of its co-ordinate bench in Oku Tech Pvt Ltd v. SangeetAgarwal and Others[1]wherein it was held that there was no discretionwith courts to extend the time for filing the written statement beyond120 days after service of summons, the Delhi High Court summarilydismissed the petition.

CONTENTIONS OF PARTIES

8. The appellant’s primary contention is that the reliance on OkuTech (supra) was erroneous as it was rendered in light of Order VIIIRule 1 of CPC as amended by the Commercial Courts Act, 2015 whichin turn was applicable to commercial disputes only. The present matterwas highlighted as being non-commercial, and it was urged that the un-amended Order VIII Rule 1 of CPC would be applicable, wherein noconsequences for not complying with the shorter timeline of 90 dayshas been provided. This provision, it was contended, was merelyprocedural and concomitantly directory as held by this Court in variousdecisions including Salem Advocate Bar Association, T.N. v. Unionof India[2].

9. Given this, the appellant put forth his contention that thedeadline of 90 days could be relaxed keeping in view the facts and 1 2016 SCC OnLine Del 6601.

2 (2005) 6 SCC 344.

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Acircumstances of a case; and argued that he himself had personallyappeared on all dates of hearing and the lapse was on the part of hisCounsel, due to which written statement could not be filed. The appellantclaims that severe prejudice would be caused to him if the delay is notcondoned for he would be left defenceless in the civil suit. Heaccordingly seeks that this Court invoke its inherent discretion underBOrder VIII Rule 1 of CPC and grant one final opportunity to file hiswritten statement.

10. This was opposed on behalf of the respondent who assertedthat multiple chances had already been granted to the appellant by theCivil Court, including opportunities beyond the maximum statutory periodCof 90 days as provided for filing of written statement under Order VIIIRule I of CPC. It was argued that continued failure to adhere to themultiple deadlines set by the Civil Court and violation of Court directions,was evidence of gross negligence on part of the appellant at best, anda deliberate delaying tactic and abuse of the process of law at the worst.

DANALYSIS & CONCLUSION

11. At the outset, it must be noted that the Commercial CourtsAct, 2015 through Section 16 has amended the CPC in its applicationto commercial disputes to provide as follows:

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E“16. Amendments to the Code of Civil Procedure, 1908 inits application to commercial disputes.—(1) The provisionsof the Code of Civil Procedure, 1908 (5 of 1908) shall, intheir application to any suit in respect of a commercialdispute of a Specified Value, stand amended in the mannerFas specified in the Schedule.

(2) The Commercial Division and Commercial Court shallfollow the provisions of the Code of Civil Procedure, 1908(5 of 1908), as amended by this Act, in the trial of a suit inrespect of a commercial dispute of a specified value.

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(3) Where any provision of any Rule of the jurisdictionalHigh Court or any amendment to the Code of CivilProcedure, 1908, by the State Government is in conflict withthe provisions of the Code of Civil Procedure, 1908 (5 of1908), as amended by this Act, the provisions of the Codeof Civil Procedure as amended by this Act shall prevail.”

H

12. Hence, it is clear that post coming into force of the aforesaidAct, there are two regimes of civil procedure. Whereas commercialdisputes [as defined under Section 2(c) of the Commercial Courts Act,2015] are governed by the CPC as amended by Section 16 of the saidAct; all other non-commercial disputes fall within the ambit of theunamended (or original) provisions of CPC.

13. The judgment of Oku Tech (supra) relied upon the learnedSingle Judge is no doubt good law, as recently upheld by this Court inSCG Contracts India Pvt. Ltd. v. KS Chamankar InfrastructurePvt. Ltd.,[3]but its ratio concerning the mandatory nature of the timelineprescribed for filing of written statement and the lack of discretion withCourts to condone any delay is applicable only to commercial disputes,as the judgment was undoubtedly rendered in the context of acommercial dispute qua the amended Order VIII Rule 1 CPC.

14. As regard the timeline for filing of written statement in a non-commercial dispute, the observations of this Court in a catena ofdecisions, most recently in Atcom Technologies Ltd. v. Y.A.Chunawala and Co.,[4]holds the field. Unamended Order VIII Rule I,CPC continues to be directory and does not do away with the inherentdiscretion of Courts to condone certain delays.

15. Let us, therefore, consider whether the appellant has madeout a case of exercising such discretionary jurisdiction? The presentcivil suit had been filed by the respondent for a decree of specificperformance of an agreement to sell one floor of an ancestral propertylocated in Devli Village, Delhi and permanent injunction againstalienation of the same by petitioner to third parties. Counsel forrespondent has not contested the non-commercial nature of the dispute,and even independently we are satisfied that the dispute does not fallwithin the parameters specified under Section 2(c) of the CommercialCourts Act, 2015 and in particular sub-clause (vii), as the immovableproperty here is not of a nature which is “used exclusively in tradeor commerce”. Hence, the appellant is correct in contending that theHigh Court overlooked the nature of the dispute and mistakenly appliedthe ratio of a case rendered in light of a modified version of the Codeof Civil Procedure, which would only be applicable to commercialdisputes.

3 AIR 2019 SC 2691.

4 (2018) 6 SCC 639.

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3 AIR 2019 SC 2691.

4 (2018) 6 SCC 639.

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A16. However, it would be gainsaid that although the unamendedOrder VIII Rule 1 of CPC is directory, it cannot be interpreted to bestowa free hand to on any litigant or lawyer to file written statement at theirown sweet-will and/or to prolong the lis. The legislative objective behindprescription of timelines under the CPC must be given due weightageBso that the disputes are resolved in a time-bound manner. Inherentdiscretion of Courts, like the ability to condone delays under Order VIIIRule 1 is a fairly defined concept and its contours have been shapedthrough judicial decisions over the ages. Illustratively, extreme hardshipor delays occurring due to factors beyond control of parties despiteproactive diligence, may be just and equitable instances for condonationCof delay.

17. However, it is clear from the facts on record that numerousopportunities had been accorded to the appellant. He was served on01.05.2017 and entered appearance through counsel on 15.05.2017. Asper Order VIII Rule I of CPC, the appellant ideally ought to have filedDhis written statement by 31.05.2017; and at the very latest by30.07.2017. In addition to two separate deadlines for filing of the writtenstatement within the 90-day timeframe prescribed by the ‘original’ OrderVIII Rule 1, the Civil Court even post expiry of the 90-day period againgave one last and final opportunity on 18.09.2017 subject to paymentEof costs of Rs 3,000. None of these deadlines were complied with. Evenon 11.10.2017, when the Court finally closed the appellant’s ability tofile written statement and struck-off his defence from the record, noattempt was made to comply with the process of law.

18. It was only on 02.11.2017, after a delay of 95 days post theFmaximum extendable period under the Proviso of Order VIII Rule 1,CPC that the appellant claimed to have filed his written statement.Curiously however, even by the next hearing on 03.11.2017, the appellanthad failed to provide a copy of the written statement to the respondentas had been noted by the Civil Court.G19. The only defence taken to these repeated and blatant lapsesis that the appellant’s counsel was not turning up. No attempt has beenmade to even proffer a reasoned justification or explanation, and it isclear that appellant is seeking condonation in a casual manner. This oughtnot to be permitted or encouraged. Courts must act stringently to ensureHthat all proceedings are decided within reasonable time, and it is but the duty of the judicial system to cultivate a culture of respectingdeadlines and time of the Court, its officers as well as of adversaries.

20. Routine condonations and cavalier attitudes towards theprocess of law affects the administration of justice. It affects docketmanagement of Courts and causes avoidable delays, cost escalationsand chaos. The effect of this is borne not only by the litigants, but alsocommerce in the country and the public-in-general who spend decadesmired in technical processes.

21. It is obvious from the record that nothing prevented theappellant from filing the written statement through counsel or in person.He has, thus, failed to give any cogent reason for the delay and is unableto satisfy due diligence on his part though he is right in his submissionthat the High Court erroneously relied upon the ratio of Oku Tech(supra).

22. Having held so, there could be no escape but to dismiss thisappeal. However, taking a lenient view given the unique circumstancesof the case, and without laying down the discretion being exercisedhereinafter, as a precedent, we direct that the written statement filedby the appellant on 02.11.2017 (as claimed), be taken on record with acopy to counsel for the respondent within one week from today andfurther subject to payment of costs of Rs. 25,000/- to the respondent.

23. The orders of the courts below are thus set aside and theappeal is disposed of in the above terms.

Divya Pandey

Appeal disposed of.

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