Supreme Court Enforces Mandatory 120-Day Written Statement Deadline in Commercial Suits: SCG Contracts India Pvt. Ltd vs K.S. Chamankar Infrastructure Pvt. Ltd. & Ors.
Background and Overview
The Supreme Court of India, in SCG Contracts India Pvt. Ltd vs K.S. Chamankar Infrastructure Pvt. Ltd. & Ors., delivered a landmark ruling reinforcing the mandatory character of the 120-day outer limit for filing a written statement in commercial suits. The Court categorically held that once this statutory deadline lapses, no court — not even through its inherent powers — can permit a written statement to be placed on record. This judgment has far-reaching consequences for defendants in commercial litigation and firmly settles the legal position on the nature of the amended provisions of the Code of Civil Procedure as modified by the Commercial Courts Act, 2015.
Factual Matrix
The dispute originated from a commercial suit instituted on 10.03.2017, with the plaintiff claiming a sum of Rs. 6,94,63,114/-. The relevant chronology of events is as follows:
- Suit was filed on 10.03.2017.
- Defendant No. 1 was served with summons on 14.07.2017.
- The outer statutory limit of 120 days from the date of service of summons expired on 11.11.2017.
- No written statement had been filed by Defendant No. 1 as of 11.11.2017.
- Instead, Defendant No. 1 filed an application under
Order VII Rule 11CPC seeking rejection of the plaint. - A learned Single Judge rejected this application on 05.12.2017, and simultaneously extended time to file a written statement by seven days, subject to payment of costs of Rs. 25,000/-, setting 15.12.2017 as the deadline.
- The written statement was duly filed by Defendant No. 1 on 15.12.2017 in compliance with the said order.
- Thereafter, an application dated 06.08.2018 was moved arguing that owing to the amendments introduced to the CPC through the Commercial Courts Act, the written statement filed after the expiry of 120 days could not legally be taken on record.
- On 24.09.2018, another learned Single Judge dismissed this application, holding that since the order dated 05.12.2017 had attained finality, the written statement ought to remain on record notwithstanding the statutory provisions to the contrary.
- The petitioner challenged both orders before the Supreme Court by way of Special Leave Petition.
Statutory Framework: Amendments Introduced by the Commercial Courts Act, 2015
The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 came into force on 23.10.2015, introducing significant amendments to the Code of Civil Procedure. The Supreme Court carefully examined three key provisions:
Order V Rule 1 CPC (as amended)
The substituted proviso reads:
"Provided further 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 days, 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 and 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."
Order VIII Rule 1 CPC (as amended)
A parallel proviso was substituted under Order VIII Rule 1 in identical terms, reinforcing that:
- The initial period for filing a written statement is 30 days.
- The court may extend this period up to a maximum of 120 days from the date of service of summons.
- Beyond 120 days, the defendant forfeits the right to file a written statement.
- The court is expressly prohibited from taking such a written statement on record.