The Himachal Pradesh High Court has unequivocally held that in commercial suits governed by the Commercial Courts Act, 2015, a defendant’s failure to file a written statement within 120 days of service of summons results in automatic forfeiture of the right to defend, irrespective of whether the court inadvertently accepted the belated filing or the plaintiff subsequently filed a replication. This ruling reinforces the mandatory nature of procedural timelines in commercial litigation.
Background & Facts
The Dispute
The plaintiff, Ghevarchand R Jain, filed a commercial suit against M/s Himland Real Estate (P) Ltd. and others seeking specific performance of an agreement for sale of immovable property. The suit was instituted under the Commercial Courts Act, 2015, as it involved a commercial dispute of specified value.
Key Facts
- The summons in the suit were served on the defendants on 06.04.2019.
- The defendants appeared before the Court on 08.04.2019 through Advocate J.L. Bhardwaj (now a Judge of this Court), who sought four weeks’ time to file a reply to OMP No. 73 of 2019.
- No application was filed by the defendants for extension of time to file the written statement under Order VIII Rule 1 CPC.
- The written statement was eventually filed on 15.03.2021 - approximately 1 year, 10 months, and 7 days after service of summons.
- The Registry’s Scrutiny Branch raised objections to the written statement due to its untimely filing.
- Despite the delay, the written statement was taken on record without a specific order permitting the extension.
- The plaintiff filed a replication to the written statement on 20.04.2021.
- The defendants filed OMP No. 189 of 2019 under Order VII Rule 11 CPC challenging the maintainability of the suit, which was dismissed on 27.08.2019 and upheld by the Supreme Court in SLP(C) No. 772 of 2021 dated 05.02.2021.
- The plaintiff filed the instant application under Section 151 CPC on 28.03.2023 seeking closure of the defendants’ defence on the ground of non-compliance with the 120-day limit.
Procedural History
- 06.04.2019: Summons served on defendants.
- 08.04.2019: Defendants appeared; time granted for reply to OMP No. 73 of 2019.
- 15.03.2021: Written statement filed - 343 days after service of summons.
- 20.04.2021: Plaintiff filed replication.
- 27.08.2019: OMP No. 189 of 2019 (Order VII Rule 11) dismissed.
- 27.05.2024: OMP No. 187 of 2023 (Order XXXIV Rule 4) dismissed.
- 28.03.2023: Plaintiff filed application under Section 151 CPC to close defence.
- 15.05.2026: Judgment delivered.
Relief Sought
The plaintiff sought an order declaring the written statement invalid, closing the defendants’ defence, and directing that the written statement and replication be excluded from consideration in the suit.
The Legal Issue
The central question was whether a written statement filed beyond the mandatory 120-day period under Order VIII Rule 1 CPC, as amended by the Commercial Courts Act, 2015, can be permitted to remain on record when the plaintiff has filed a replication, and whether the court’s inadvertent acceptance of the belated filing ousts the statutory forfeiture of the defendant’s right to defend.
Arguments Presented
For the Petitioner
Mr. N.K. Sood, Senior Advocate, argued that Order VIII Rule 1 CPC, as amended by the Commercial Courts Act, imposes a mandatory, non-extendable 120-day limit for filing written statements in commercial suits. He relied on M/S SCG Contracts India Pvt. Ltd. v. K.S. Chamankar Infrastructure Pvt. Ltd. (2019) 12 SCC 210, where the Supreme Court held that the mandatory provisions of the amended CPC cannot be circumvented by invoking inherent powers under Section 151 CPC. He emphasized that the defendants’ failure to apply for extension, coupled with the clear language of forfeiture, rendered the written statement legally non-existent. The plaintiff’s replication, he submitted, was a procedural formality and did not constitute waiver or acquiescence.
For the Respondent
Mr. Udit Shaurya Kaushik contended that the written statement had been accepted on record and the plaintiff had filed a replication, thereby waiving any objection through implied conduct. He relied on Arce Polymers Private Limited v. Alphine Pharmaceuticals Private Limited (2022) 2 SCC 221, arguing that the plaintiff’s conduct amounted to waiver of statutory rights. He further claimed that the written statement was filed within the statutory period but was delayed in registration due to technical objections, and that the court’s prior acceptance should prevail.
The Court's Analysis
The Court undertook a detailed examination of Order V Rule 1 CPC, Order VIII Rule 1 CPC, and Section 16 of the Commercial Courts Act, 2015, as amended by Act 4 of 2016. It noted that the amendment introduced a clear, unambiguous consequence: upon expiry of 120 days, the defendant forfeits the right to file a written statement, and the court is expressly prohibited from allowing it to be taken on record.
"...the defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record."
The Court rejected the defendants’ argument that the written statement was filed within the period, holding that the date of filing - 15.03.2021 - was unambiguously beyond the 120-day window from 06.04.2019. The fact that the Registry raised objections did not alter the legal position.
The Court distinguished Arce Polymers on the grounds that it involved waiver of a statutory right in the context of SARFAESI proceedings, where the borrower had engaged in repeated, deliberate conduct to induce the bank’s indulgence. In contrast, the plaintiff in the present case had merely filed a replication - a procedural step mandated by the CPC - which cannot be construed as an intentional relinquishment of a statutory right.
The Court further held that the Supreme Court’s decision in SCG Contracts was directly on point: the mandatory nature of the 120-day limit cannot be overridden by the court’s inadvertent acceptance or the plaintiff’s subsequent conduct. The court emphasized that the provision is not directory but mandatory, with a built-in consequence - forfeiture - which leaves no room for judicial discretion.
The Court also rejected the notion that the plaintiff’s failure to object earlier estopped him from seeking closure of the defence. The statutory right to enforce the 120-day limit is not a personal privilege but a procedural safeguard designed to ensure expedition in commercial litigation. The Court observed:
"...there is no question of acquiescence and waiver, if any, at the behest of the applicant/plaintiff, rather non-applicants/defendants on their failure to file written statement within a prescribed period of 120 days have forfeited their right to file written statement in the case at hand."
The Verdict
The plaintiff’s application was allowed. The Court held that the written statement filed on 15.03.2021 was invalid and could not be taken on record. The defence of the defendants is closed. The written statement and the plaintiff’s replication are excluded from consideration in the suit. The suit shall proceed ex parte against the defendants.
What This Means For Similar Cases
Procedural Compliance Is Non-Negotiable in Commercial Suits
- Practitioners must treat the 120-day deadline under Order VIII Rule 1 CPC as absolute and non-extendable.
- Any written statement filed after this period is legally void, regardless of whether it was accepted by the court or the plaintiff filed a replication.
- Courts are under a duty to reject such filings even if inadvertently admitted.
Replication Does Not Constitute Waiver
- Filing a replication is a mandatory procedural step under Order VIII Rule 5 CPC and cannot be construed as implied waiver of the statutory right to challenge untimely filings.
- Waiver under Arce Polymers requires deliberate, affirmative conduct to induce reliance - mere silence or procedural compliance does not suffice.
- Applications under Section 151 CPC cannot be used to validate filings that violate mandatory timelines.
Strategic Implications for Litigants
- Plaintiffs must file applications under Section 151 CPC immediately upon discovering a belated written statement.
- Defendants must file applications for extension before the 120-day deadline; delay beyond this point renders the defence legally non-existent.
- Courts must proactively identify and exclude belated written statements, even if raised by the plaintiff at a later stage.
