Court Cannot Strike Off Defence If 120-Day Period Under Commercial Courts Act Has Not Expired: Delhi High Court Restores Right to File Written Statement in Commercial Suit

"Once the plaint is amended, the clock under Order 8 Rule 1 CPC cannot start afresh merely by ipso facto reference to original summons" – In a significant decision Delhi High Court ruled that the right to file a written statement in a commercial suit cannot be closed if the statutory 120-day period under the Commercial Courts Act has not expired. Justice Manoj Jain observed that procedural rigour must give way to fairness, particularly when amendment of pleadings is involved, cautioning courts against a mechanical application of deadlines that may compromise the right to defend.

The petitioners, who were defendants in a commercial suit, had been duly served and had entered appearance. On 29th April 2024, after their appearance, the plaintiff moved an application under Order VI Rule 17 CPC, seeking amendment of the plaint. The amendment was allowed by the trial court on the same day, and defendants were granted time to file a written statement in response to the amended plaint.

However, when the matter was listed on 12th July 2024, the trial court recorded that the written statement had not been filed and proceeded to strike off the defence, stating that the 120-day limit under the Commercial Courts Act had elapsed.

This order became the subject of challenge before the High Court.

At the heart of the matter was whether the right to file a written statement could be closed after amendment of the plaint, even though the full statutory period under the Commercial Courts Act had not yet expired.

Justice Manoj Jain made a critical clarification:

“The stipulation given in proviso to Order 8 Rule 1 CPC is for calculating the period within which a written statement is to be filed. Such period has to be reckoned from the date on which any such defendant was served with the summons.”

However, the Court emphasized that amendment of the plaint alters the dynamics of this timeline:

“Once the service is complete and defendant puts in appearance as well and if subsequent thereto, there is any amendment in the plaint, though the Court can give some kind of time-frame to the defendant to file written statement to such amended plaint, for the purposes of striking of defence, the Court cannot, ipso facto, rely on the abovesaid provision.”

Justice Jain was also critical of the manner in which summons were issued in the case, noting:

“Even the summons which had been issued to the defendants are not in the proper form as these are ‘Summons for Settlement of Issues’… the summons prescribed in relation to a commercial suit were never served upon the defendant.”

The Court further found that the 120-day outer limit for filing the written statement had not expired as of 12th July 2024. Thus, the trial court’s order was both procedurally and legally untenable.

Justice Jain acknowledged that the defendants should have exercised greater diligence, but upheld the principle that procedural defaults cannot override substantive justice:

“Evidently, the defendants should have also been extra-cautious and vigilant and should have ensured that the written statement was filed, as quickly as possible… However… the right to file written statement was closed despite that fact that the permissible outer limit of 120 days had not yet expired.”

It was brought to the Court’s notice that the written statement was already filed on 25.08.2024, and a copy had been supplied to the opposite side. In light of this, the Court ordered:

“If such written statement has already been submitted before the learned Commercial Court, it will be deemed to be taken on record… if for any reason whatsoever, if it is still not on record, the defendants would ensure that such written statement is filed within seven days from today.”

In addition, the Court imposed costs of ₹25,000/- on the defendants, observing that some accountability was still warranted:

“Defendant Nos. 1 to 3 are also burdened with a total cost of ₹25,000/- which shall be cleared within seven days from today.”

The matter was remanded back to the Commercial Court for further proceedings in accordance with law.

This judgment affirms the Delhi High Court’s commitment to ensuring fair play in commercial litigation, where procedural timelines, though stringent, must be applied with an understanding of the context. The Court held that amendment of pleadings justifies resetting the clock for filing a written statement, and striking off the defence before expiry of the statutory limit under the Commercial Courts Act is impermissible.

Date of Decision: 7th May 2025