The Karnataka High Court has reaffirmed the stringent timeline prescribed under the Commercial Courts Act, 2015, dismissing a writ petition challenging the rejection of a delayed written statement. The judgment underscores that defendants in commercial disputes forfeit their right to file a written statement beyond the 120-day limit, even accounting for court vacations, unless filed promptly upon reopening. This ruling serves as a critical reminder for practitioners to strictly adhere to procedural timelines in commercial litigation.
Background & Facts
The Dispute
The petitioners, directors and representatives of Goa Sponge and Power Ltd., were defendants in a commercial suit (O.S. No. 157/2024) before the Principal District Judge and Commercial Court, Belagavi. The respondent, Usman Traders, had filed the suit, and summons were personally served on the petitioners on 23.01.2025. Under the Commercial Courts Act, 2015, the petitioners were required to file their written statement within 120 days of service, i.e., by 23.05.2025. However, the petitioners failed to comply with this deadline.
Key Facts
- 23.01.2025: Summons served personally on the petitioners/defendants.
- 23.05.2025: Last date for filing the written statement under the Commercial Courts Act, 2015.
- 25.06.2025: Petitioners filed I.A. No. 1 under Section 151 of the Code of Civil Procedure (CPC), seeking permission to file the written statement beyond the prescribed period.
- The petitioners contended that the intervening summer vacation of the Commercial Court deprived them of an opportunity to file the written statement within the stipulated time.
Procedural History
- O.S. No. 157/2024: Suit filed by Usman Traders before the Commercial Court, Belagavi.
- 23.01.2025: Summons served on the petitioners.
- 23.05.2025: Deadline for filing written statement expired.
- 25.06.2025: Petitioners filed I.A. No. 1 seeking leave to file the written statement.
- 13.01.2026: Commercial Court rejected I.A. No. 1, holding that the written statement could not be accepted beyond the 120-day limit.
- WP No. 103034/2026: Writ petition filed before the Karnataka High Court under Article 227 of the Constitution of India, challenging the impugned order dated 13.01.2026.
Relief Sought
The petitioners sought:
- Quashing of the impugned order dated 13.01.2026 passed by the Commercial Court, Belagavi.
- A direction to the Commercial Court to accept the written statement filed on 25.06.2025.
- Condonation of the delay in filing the written statement, citing the intervening summer vacation as a ground for extension.
The Legal Issue
The central question before the Court was whether the Commercial Courts Act, 2015 permits the extension of the 120-day limit for filing a written statement, particularly when the delay is attributed to court vacations. Additionally, the Court had to determine whether Section 151 of the CPC could be invoked to circumvent the statutory embargo imposed by the Commercial Courts Act.
Arguments Presented
For the Petitioners
- The petitioners contended that the summer vacation of the Commercial Court prevented them from filing the written statement within the prescribed period.
- They argued that the Commercial Court had failed to consider the intervening vacation and had mechanically rejected their application.
- Reliance was placed on the inherent powers of the Court under Section 151 of the CPC to condone the delay and accept the written statement.
For the Respondent
- The respondent opposed the petition, arguing that the Commercial Courts Act, 2015 imposes a strict 120-day limit for filing written statements, with no scope for extension beyond this period.
- The respondent contended that the petitioners had failed to act with due diligence by not filing the written statement immediately upon the reopening of the Court after the summer vacation.
- It was further submitted that the Commercial Courts Act overrides the general provisions of the CPC, leaving no room for judicial discretion to extend the timeline.
The Court's Analysis
The Court undertook a detailed examination of the Commercial Courts Act, 2015, particularly Section 16, which mandates strict adherence to the amended provisions of the CPC governing commercial disputes. The Court observed that the legislative intent behind the Commercial Courts Act is to ensure expeditious resolution of commercial disputes, and the 120-day limit for filing written statements is a non-negotiable statutory requirement.
"Section 16 of the Commercial Courts Act, 2015 gives overriding effect to the provisions governing commercial disputes and mandates strict adherence to the amended provisions of the Code of Civil Procedure applicable to such proceedings. The legislative intent is explicit that a defendant is required to file the written statement within the prescribed period and, in any event, not beyond 120 days from the date of service of summons. Upon expiry of the said period, the defendant forfeits the right to file the written statement."
The Court relied on the Supreme Court's decision in Ajay Gupta v. Raju @ Rajendra Singh Yadav ((2016) 14 SCC 314), which held that once the statutory period for filing a written statement expires, the Court is divested of any discretion to extend the time further. The Court emphasized that Section 151 of the CPC cannot be invoked to circumvent the statutory embargo imposed by the Commercial Courts Act.
The Court also addressed the petitioners' argument regarding the summer vacation, noting that while the period of vacation could be excluded for computing the limitation, this benefit is contingent upon the defendant filing the written statement immediately upon the reopening of the Court. In this case, the petitioners failed to do so, filing the written statement only on 25.06.2025, well after the reopening of the Court. Thus, the Court held that the petitioners could not derive any advantage from the intervening vacation.
"Though it is true that the period during which the Commercial Courts remained closed on account of summer vacation can be excluded for the purpose of computing the limitation prescribed for filing the written statement, such benefit would be available only if the defendant acts with due diligence and presents the written statement immediately upon reopening of the Court after the vacation."
The Verdict
The Karnataka High Court dismissed the writ petition, upholding the impugned order dated 13.01.2026 passed by the Commercial Court, Belagavi. The Court held that:
- The 120-day limit for filing a written statement under the Commercial Courts Act, 2015 is mandatory and cannot be extended.
- The petitioners forfeited their right to file the written statement by failing to comply with the statutory timeline.
- The Commercial Court was correct in rejecting I.A. No. 1, as it lacked the jurisdiction to condone the delay.
- The impugned order did not suffer from any jurisdictional error or infirmity warranting interference under Article 227 of the Constitution of India.
What This Means For Similar Cases
Strict Adherence to Timelines Is Non-Negotiable
- Practitioners must ensure that written statements in commercial disputes are filed within 120 days of service of summons, as prescribed under the Commercial Courts Act, 2015.
- Courts are divested of discretion to extend this timeline, even in cases of alleged hardship or intervening vacations.
- Section 151 of the CPC cannot be used to bypass the statutory embargo imposed by the Commercial Courts Act.
Vacation Periods Offer No Automatic Relief
- While the period of court vacations may be excluded for computing the limitation, defendants must file the written statement immediately upon the reopening of the Court to avail this benefit.
- Delayed filings, even by a few days, will not be condoned, and defendants risk forfeiting their right to file a written statement.
Legislative Intent Overrides Judicial Discretion
- The Commercial Courts Act, 2015 was enacted to ensure expeditious resolution of commercial disputes, and its provisions override the general provisions of the CPC.
- Courts are bound by the legislative mandate and cannot exercise discretion to extend timelines contrary to the statutory provisions.
Practitioners should take note of this judgment to avoid procedural pitfalls in commercial litigation, ensuring strict compliance with timelines to protect their clients' rights.
