120-day timeline under order VIII rule 1 CPC applies to plaintiff's written statement to counter-claim in commercial suits: supreme court

Case Title: A.K. Ghosh & Company and Ors. v. Biman Bose and Ors.

The Supreme Court has held that the mandatory 120-day timeframe prescribed under the proviso to Order VIII Rule 1 of the Code of Civil Procedure, 1908, as applicable to commercial suits under the Commercial Courts Act, 2015, also governs the filing of a written statement by a plaintiff to a defendant's counter-claim.

The plaintiffs had filed a recovery suit before the Calcutta High Court against the defendants for dues arising from supply of printing paper. The defendants filed a written statement raising a counter-claim, copies of which were served on the plaintiffs' Advocate-on-Record in July 2023. The plaintiffs sought leave to file their written statement to the counter-claim only in March 2024, after a delay of 238 days. The Single Judge dismissed the application, holding that the plaintiffs could not escape the 120-day timeframe applicable under Order VIII Rule 1 CPC by virtue of Order VIII Rule 6G CPC, which extends the rules relating to a defendant's written statement to a written statement filed in answer to a counter-claim. The Division Bench dismissed the plaintiffs' appeal both on maintainability and on merits.

Before the Supreme Court, the plaintiffs argued that the 120-day timeframe was specific to a defendant's written statement and could not be applied to a plaintiff's reply to a counter-claim, which was governed instead by Order VIII Rule 6A(3) CPC, permitting the plaintiff to file such a reply within such period as may be fixed by the Court. It was contended that since no time had been fixed by the trial court in this case, the plaintiffs could not be penalised for the delay.

The defendants argued that Order VIII Rule 6G CPC plainly extends the rules relating to a written statement by a defendant, including the 120-day outer limit, to a written statement filed to a counter-claim.

The Court traced the legislative history of Order VIII Rule 1 CPC and Order VIII Rule 6A to 6G CPC, noting that the Commercial Courts Act, 2015 substituted the proviso to Order VIII Rule 1 CPC for commercial suits specifically to curtail delays, providing that a defendant who fails to file a written statement within 120 days forfeits the right to do so. The Court held that this objective would be defeated if a plaintiff replying to a counter-claim were permitted an open-ended timeframe under Order VIII Rule 6A(3) CPC. It held that Order VIII Rule 6G CPC does not confine itself to the contents of a written statement, and that its plain language extends the temporal requirements of Order VIII Rule 1 CPC to a written statement filed in answer to a counter-claim as well.

The Court disagreed with the view taken by some High Courts that, in the absence of a time being fixed under Order VIII Rule 6A(3) CPC, a plaintiff is left free to file a written statement to a counter-claim at its own pace. It held that where no time is fixed under Rule 6A(3), Rule 6G applies the proviso to Rule 1 to fix the outer temporal limit.

Accordingly, the Court held that a plaintiff in a commercial suit must ordinarily file a written statement to a counter-claim within 30 days from service of summons or receipt of the counter-claim, extendable for sufficient cause, on payment of costs, up to a maximum of 120 days.

On the maintainability of the appeal before the Division Bench, the Court held that under Section 13(1A) of the Commercial Courts Act, 2015, an appeal lies only against orders specifically enumerated under Order XLIII CPC or Section 37 of the Arbitration and Conciliation Act, 1996. Since an order passed under Order VIII CPC is not one of the orders enumerated under Order XLIII CPC, the plaintiffs' appeal before the Division Bench was not maintainable.

The appeals were accordingly dismissed.