As per the case facts, appeals challenged a High Court judgment that denied accepting written statements because the filing period had expired. The reason for the appeal to the Supreme ...
2023 INSC 867 1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 6411-6418 OF 2023
(Arising out of SLP (C) Nos. 4789-4796 of 2021)
Aditya Khaitan & Ors. … Appellant (s)
Versus
IL and FS Financial Services Limited ...Respondent(s)
J U D G M E N T
K.V. Viswanathan, J.
1. Leave granted.
2. The present appeals challenge the judgment of the High
Court at Calcutta dated 26.02.2021 passed in General
Application Nos. 3,4,5,6,7,8,9 and 10 of 2021 in Civil Suit
No. 177 of 2019. By the said judgment, the High Court had
dismissed the said applications and consequently denied the
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applicants/defendants prayer to take on record their written
statements. According to the High Court, the applications
cannot be allowed as the period of 30 days to file the written
statements had expired on 08.03.2020. The High Court has
held that the order dated 23.03.2020 passed by this Court in
Suo Motu Writ Petition (C) No. 3 of 2020 [In Re: Cognizance
for Extension of Limitation], which is to be effective from
15.03.2020 would not enure to the benefit of the
applicants/defendants since the limitation period for filing the
written statements had expired on 08.03.2020. The High
Court has further held that, as held in Sagufa Ahmed and
Others Vs. Upper Assam Plywood Products Private Limited
and Others (2021) 2 SCC 317, since the orders of this Court
under Article 142 of the Constitution of India extended only
“the period of limitation” and not the period up to which
delay can be condoned, the applications for taking on record
the written statements cannot be entertained.
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Relevant Facts:
3. To understand the correctness or otherwise of the
judgment impugned, the following basic facts are necessary:-
i) On 30.08.2019, the respondent herein – IL and FS
Financial Services Limited (the plaintiff) filed a suit for
recovery of money along with other consequential reliefs in
C.S. No. 177 of 2019 on the file of the High Court at
Calcutta. There were nine defendants. The said nine
defendants are appellants before us.
ii) On 07.02.2020, summons was served in the suit on the
defendants. Being a Commercial Suit, the 30-day period for
filing written statements expired on 08.03.2020. On
06.06.2020, the further condonable period of 90 days also
expired.
iii) No written statements having been filed within the said
timelines, the appellants, on 20.01.2021, filed in all eight
applications for the nine defendants. The prayer in the
applications was that the written statements of the defendants
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be accepted by extending the time. The reasons set out in the
affidavit were that the World Health Organization declared
COVID-19 as a pandemic on 11.03.2020; that the
Government of India and the State Governments issued
advisories related to the pandemic; that on 11.03.2020, orders
were promulgated by the Government of India under the
Disaster Management Act, 2005 to enhance the preparedness
and containment of the pandemic; that the Government of
West Bengal on 22.03.2020 imposed lockdown w.e.f.
23.03.2020; that during the month of April, 2020, the office
of the answering applicants was completely closed. Most
importantly, the affidavits relied on the order of this Court
dated 23.03.2020 in In Re: Cognizance for Extension of
Limitation in Suo Motu W.P. (C) No. 3 of 2020 whereby this
Court took suo motu cognizance of the situation and extended
the period of limitation w.e.f. 15.03.2020 till further orders.
The applicants also referred to the order of 10.07.2020
wherein this Court further extended the period of limitation,
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in connection with certain specific statutes. They averred
that since the further period of 90 days had not expired at the
time when the aforesaid order of 23.03.2020 was passed, they
sought refuge under the orders of this Court dated 23.03.2020
and 10.07.2020.
iv) These applications were vehemently opposed by the
plaintiffs by their reply of 17.02.2021. Their objection was
that the orders of this Court dated 23.03.2020 and 10.07.2020
would not come to the rescue of the applicants since the
limitation period had expired prior to 15.03.2020.
v) The plaintiff relied on the judgment of this Court dated
18.09.2020 in Sagufa Ahmed (supra) in support of its
contention. The High Court having accepted the stand of the
plaintiff did not take the written statements on record.
Aggrieved the applicants/defendants are before us.
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Contentions:
4. We have heard Mr. Sanjoy Ghose, learned Senior
Counsel for the appellants and Mr. Sahil Tagotra, learned
Counsel for the respondent/plaintiff.
5. Mr. Sanjoy Ghose, learned Senior Counsel for the
appellants, by placing reliance on the judgment of this Court
in Prakash Corporates vs. Dee Vee Projects Limited, (2022)
5 SCC 112 submitted that much water has flown after the
judgment of Sagufa Ahmed (supra).
6. According to the learned Senior Counsel, Prakash
Corporates (supra) while noticing the orders of 23.03.2020,
06.05.2020 and 10.07.2020 also deals with the directions in
the orders of 08.03.2021, 27.04.2021 and 23.09.2021 made in
the same In re: Cognizance for Extension of Limitation.
Noticing these subsequent orders, according to the learned
Senior Counsel, the Court has, in paras 28.1, 28.2 and 33.4 of
Prakash Corporates (supra) has, for the reasons set out
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therein, distinguished Sagufa Ahmed’s case (supra). The
said paragraphs are extracted herein below:-
“28.1. Having regard to the purpose for which this Court
had exercised the plenary powers under Article 142 of the
Constitution of India and issued necessary orders from
time to time in SMWP No. 3 of 2020, we are clearly of
the view that the period envisaged finally in the order
dated 23.09.2021 is required to be excluded in computing
the period of limitation even for filing the written
statement and even in cases where the delay is otherwise
not condonable. It gets perforce reiterated that the orders
in SMWP No. 3 of 2020 were of extraordinary measures
in extraordinary circumstances and their operation cannot
be curtailed with reference to the ordinary operation of
law.
28.2. In other words, the orders passed by this Court on
23.03.2020, 06.05.2020, 10.07.2020, 27.04.2021 and
23.09.2021 in SMWP No. 3 of 2020 leave nothing to
doubt that special and extraordinary measures were
provided by this Court for advancing the cause of justice
in the wake of challenges thrown by the pandemic; and
their applicability cannot be denied in relation to the
period prescribed for filing the written statement. It
would be unrealistic and illogical to assume that while
this Court has provided for exclusion of period for
institution of the suit and therefore, a suit otherwise filed
beyond limitation (if the limitation had expired between
15.03.2020 to 02.10.2021) could still be filed within 90
days from 03.10.2021 but the period for filing written
statement, if expired during that period, has to operate
against the defendant.
33.4 Having regard to the orders subsequently passed by
the three-Judge Bench of this Court in SMWP No. 3 of
2020 (and MA No. 665 of 2021 therein), as also having
regard to the fundamental difference of facts and the
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surrounding factors, the said decision in Sagufa Ahmed,
in our view, is also of no application to the present case.”
According to the learned Senior Counsel, the above
paragraphs squarely cover his case, since the extended period
expired on 06.06.2020.
7. Mr. Sahil Tagotra, learned Counsel for the plaintiff
reiterated the findings of the High Court and submitted that
the applicants have forfeited their right to file the written
statements.
8. In the above background, the only question that arises
for consideration is, was the High Court justified in rejecting
the application for extension of time dated 20.01.2021 and in
not taking the written statements on record?
Discussion and Conclusion:
9. “Vigilantibus non dormientibus jura subveniunt” - the
law assists those who are vigilant, not those who sleep over
their rights is a fundamental legal maxim on which statutes of
limitations are premised.
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10. When the whole world was in the grip of devastating
pandemic, it could never have been said that the parties were
sleeping over their rights. It is, at this juncture, that this
Court stepped in and after taking suo motu cognizance passed
orders under Article 142 of the Constitution of India
extending the deadlines. The extraordinary situation was
dealt with rightly by extraordinary orders protecting the
rights of parties by ensuring that their remedies and defences
were not barred.
11. In suo motu proceedings titled In Re: Cognizance for
Extension of Limitation, series of orders came to be passed.
Those orders are dated 23.03.2020, 06.05.2020, 10.07.2020,
08.03.2021, 27.04.2021 and 23.09.2021. The orders are not
repeated since the relevant portions are extracted in Prakash
Corporates (supra).
12. However, the orders of 23.03.2020 and 08.03.2021 are
extracted herein below to show the contrast between the
orders that obtained when Sagufa Ahmed (supra) was
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pronounced and the orders passed post- Sagufa Ahmed
(supra). Sagufa Ahmed (supra) was pronounced on
18.09.2020 when the orders of 23.03.2020, 06.05.2020 and
10.07.2020 were in vogue. The order of 23.03.2020 in In Re:
Cognizance for Extension of Limitation reads as under: -
“This Court has taken Suo Motu cognizance of the
situation arising out of the challenge faced by the country
on account of Covid-19 Virus and resultant difficulties
that may be faced by litigants across the country in filing
their petitions/applications/suits/appeals/all other
proceedings within the period of limitation prescribed
under the general law of limitation or under Special Laws
(both Central and/or State).
To obviate such difficulties and to ensure that
lawyers/litigants do not have to come physically to file
such proceedings in respective Courts/Tribunals across
the country including this Court, it is hereby ordered that
a period of limitation in all such proceedings, irrespective
of the limitation prescribed under the general law or
Special Laws whether condonable or not shall stand
extended w.e.f. 15
th
March 2020 till further order/s to be
passed by this Court in present proceedings.
We are exercising this power under Article 142
read with Article 141 of the Constitution of India and
declare that this order is a binding order within the
meaning of Article 141 on all Courts/Tribunals and
authorities.
This order may be brought to the notice of all High
Courts for being communicated to all subordinate
Courts/Tribunals within their respective jurisdiction.
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Issue notice to all the Registrars General of the
High Courts, returnable in four weeks.”
(emphasis supplied)
13. The order of 06.05.2020 directed that the limitation
prescribed under the Arbitration & Conciliation Act, 1996
and under Section 138 of the Negotiable Instruments Act,
1881 shall stand extended w.e.f. 15.03.2020 until further
orders. It also provides that in case the limitation had expired
after 15.03.2020, the period between 15.03.2020 and lifting
of lockdown in the jurisdictional area would be extended for
a period of 15 days after the lifting of lockdown. Thereafter,
on 10.07.2020, taking note of the submission of the learned
Attorney General, this Court extended the order of
23.03.2020 and 06.05.2020 to Section 29A of the Arbitration
and Conciliation Act, 1996 and also to Section 23(4) which
provided for timelines for completion of statement of claim
and defence and also extended time under Section 12A of the
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Commercial Courts Act, 2015 which prescribed time limit for
completing the process of compulsory pre-litigation,
mediation and settlement. What is significant is that there
was no change in the basic order of 23.03.2020, namely, that
what was extended was the period of limitation.
14. It was on this basis that Sagufa Ahmed’s case (supra)
decided on 18.09.2020 held in para 17 as under:-
“17. But we do not think that the appellants can take refuge
under the above order in Cognizance for Extension of
Limitation, In re. What was extended by the above order of
this Court was only “the period of limitation” and not the
period up to which delay can be condoned in exercise of
discretion conferred by the statute…….”
15. Contrasting the order of 23.03.2020 with 08.03.2021,
which order of 08.03.2021 is reiterated in the orders of
27.04.2021 and 22.09.2021, the following emerges. The
order of 08.03.2021 needs to be extracted first.
“1. Due to the onset of COVID-19 pandemic, this Court
took suo motu cognizance of the situation arising from
difficulties that might be faced by the litigants across the
country in filing petitions/applications/suits/appeals/all
other proceedings within the period of limitation
prescribed under the general law of limitation or under
any special laws (both Central or State). By an order
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dated 27.03.2020 this Court extended the period of
limitation prescribed under the general law or special
laws whether compoundable or not with effect from
15.03.2020 till further orders. The order dated
15.03.2020 was extended from time to time. Though, we
have not seen the end of the pandemic, there is
considerable improvement. The lockdown has been lifted
and the country is returning to normalcy. Almost all the
Courts and Tribunals are functioning either physically or
by virtual mode. We are of the opinion that the order
dated 15.03.2020 has served its purpose and in view of
the changing scenario relating to the pandemic, the
extension of limitation should come to an end.
2. We have considered the suggestions of the learned
Attorney General for India regarding the future course of
action. We deem it appropriate to issue the following
directions: -
2.1. In computing the period of limitation for any suit,
appeal, application or proceeding, the period from
15.03.2020 till 14.03.2021 shall stand excluded.
Consequently, the balance period of limitation remaining
as on 15.03.2020, if any, shall become available with
effect from 15.03.2021.
2.2. In cases where the limitation would have expired
during the period between 15.03.2020 till 14.03.2021,
notwithstanding the actual balance period of limitation
remaining, all persons shall have a limitation period of 90
days from 15.03.2021. In the event the actual balance
period of limitation remaining, with effect from
15.03.2021, is greater than 90 days, that longer period
shall apply.
2.3. The period from 15.03.2020 till 14.03.2021 shall also
stand excluded in computing the periods prescribed
under Sections 23(4) and 29-A of the Arbitration and
Conciliation Act, 1996, Section 12-A of the Commercial
Courts Act, 2015 and provisos (b) and (c) of Section 138
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of the Negotiable Instruments Act, 1881 and any other
laws, which prescribe period(s) of limitation for
instituting proceedings, outer limits (within which the
court or tribunal can condone delay) and termination of
proceedings.”
2.4. The Government of India shall amend the guidelines
for containment zones, to state.
"Regulated movement will be allowed for medical
emergencies, provision of essential goods and services,
and other necessary functions, such as, time bound
applications, including for legal purposes, and
educational and job-related requirements."
3. The Suo Motu Writ Petition is disposed of
accordingly”
16. A perusal of para 2.3 of the above order shows that this
Court directed that the period from 15.03.2020 till
14.03.2021 will stand excluded in computing:-
a) the period prescribed under 23(4) and 29-A of the
Arbitration and Conciliation Act, 1996;
b) Section 12-A of the Commercial Courts Act, 2015;
c) provisos (b) and (c) of Section 138 of the Negotiable
Instruments Act, 1881; and
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(d) any other laws which prescribe period of limitation for
instituting proceedings, outer limits (within which the court
or tribunal can condone delay) and termination of
proceedings.
17. As would be clear from hereinabove, the very basis of
the judgment in Sagufa Ahmed (supra) that under the
23.03.2020 order, only the period of limitation has been
extended and not the period up to which delay can be
condoned, has been taken away by expanding the protection
by excluding the period even for computing outer limits
within which the court or tribunal can condone delay. This is
an important subsequent aspect which has a great bearing in
deciding the present controversy.
18. Prakash Corporates case (supra) also notices the fact
that the order of 08.03.2021 and subsequent orders also by a
Bench of three Hon’ble Judges were not and could not have
been available for the Bench which decided Sagufa Ahmed’s
case (supra) since Sagufa Ahmed’s case (supra) was
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decided on 18.09.2020. In Prakash Corporates (supra),
though the period of 30 days for filing written statements
expired on 05.02.2021 and the 120-day outer limit expired on
06.05.2021, written statements notarized on 07.07.2021 was
directed to be taken on record. The Court in Prakash
Corporates (supra) relied on the orders of 23.03.2020,
08.03.2021, 27.04.2021 and also noticed the order of
23.09.2021 while so ordering.
19. By virtue of Section 16 of the Commercial Courts Act,
2015 brought into force on 23.10.2015 some provisions of
the Code of Civil Procedure, 1908 in its application to the
commercial disputes were amended. The schedule to the
Commercial Courts Act amended Order 5 Rule 1(1), Order 8
Rule 1 and Order 8 Rule 10 insofar as their applicability to
commercial disputes was concerned. Order 8 Rule 1 reads as
under:
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“Order 8 Rule 1
“1. Written statement.- The defendant shall, within
thirty days from the date of service of summons on him,
present a written statement of his defence:
Provided that where the defendant fails to file the
written statement within the said period of thirty days, he
shall be allowed to file the written statement on such
other day, as may be specified by the court, for reasons to
be recorded in writing and on payment of such costs as
the court deems fit, but which shall not be later than one
hundred twenty days from the date of service of
summons and on expiry of one hundred twenty days from
the date of service of summons, 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.”
20. As would be seen from the above, the outer limit within
which the court or tribunal can condone the delay is 120 days
from the date of summons.
21. As has been set out hereinabove, while summons was
served on 07.02.2020, the 30 days period expired on
08.03.2020 and the outer limit of 120 days expired on
06.06.2020. The application for taking on record the written
statements and the extension of time was filed on 20.01.2021.
Applying the orders of 08.03.2021 and the orders made
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thereafter and excluding the time stipulated therein, the
applications filed by the applicants on 20.01.2021 are well
within time. The judgment passed by the High Court, for the
reasons set out herein above, needs to be set aside. The
principle underlying the orders of this Court dated
08.03.2021, 27.04.2021 and 23.09.2021, in In Re:
Cognizance for Extension of Limitation, albeit those orders
being passed, subsequent to the impugned order, would enure
to the benefit of the applicants-defendants.
22. For the reasons stated above, the Appeals are allowed
and the written statements filed on 20.01.2021 are directed to
be taken on record. The suit be proceeded with thereafter.
The Appeals stand allowed with no order as to costs.
…..…………………J.
(J.K. Maheshwari)
…..…………………J.
(K.V. Viswanathan)
New Delhi;
October 3, 2023.
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