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Continental Transport Organization Pvt. Ltd. v/s ICICI Lombard General Insurance Co. Ltd.

    Civil Appeal No. 9836 of 2010 [Arising out of S.L.P.(C)No. 9698 of 2010]

    Decided On, 22 November 2010

    At, Supreme Court of India

    By, THE HONOURABLE MR. JUSTICE G.S. SINGHVI & THE HONOURABLE MR. JUSTICE ASOK KUMAR GANGULY

   



Judgment Text

Leave granted.

This is an appeal for setting aside order of the Division Bench of the Delhi High Court whereby the first appeal preferred by the appellant against the order of the learned Single Judge, who allowed the application filed by the plaintiff-respondent for taking off the written statement filed by the appellant and dismissed the application filed by the latter for condonation of delay in filing the written statement was dismissed.

The respondent filed suit against the appellant for recovery of Rs.29,43,809/- along with interest by alleging that due to negligence of the employee/agent of the appellant, the goods i.e. the transformer being transported by it was damaged. The summon of the suit was served upon the appellant on 2.8.2008. The vakalatnama was filed on behalf of the appellant on 26.8.2008. The written statement was filed on 6.11.2008 to contest the suit.

After about four months of filing of the written statement, the respondent filed I.A. No.4945 of 2009 under Order VIII Rule 1 read with Section 151 of the Code of Civil Procedure (CPC) for taking the written statement off the record on the ground that the same had been filed beyond the prescribed period of limitation. The appellant not only contested I.A. No.4945 of 2009 but also filed I.A. No.9957 of 2009 under Order VIII Rule 1 read with Section 148 CPC for condonation of delay in filing the written statement.

The learned Single Judge allowed I.A. No.4945 of 2009 and directed that the written statement filed by the appellant be taken off the record. Simultaneously, he dismissed I.A. No.9957 of 2009. The Division Bench of the High Court dismissed the appeal and confirmed the order passed by the learned Single Judge.

We have heard learned counsel for the appellant and perused the record including the application filed by the appellant for condonation of delay in filing the written statement. We have also gone through the judgments of three-Judge Bench in Kailash v. Nanhku (2005) 4 SCC 480, R.N. Jadi & Brothers v. Subhashchandra (2007) 6 SCC 420 and Mohd. Yusuf v. Faiz Mohammad (2009) 3 SCC 513 to which reference has been made in the order of the Division Bench.

In our view, the learned Single Judge and the Division Bench of the High Court have adopted a hyper-technical approach in dealing with the application filed by the appellant for condonation of delay in filing the written statement and misapplied the law laid down by this Court.

In Kailash v. Nanhku, the three-Judge Bench considered the scope of Order VIII Rule 1 and observed:

"Considering the object and purpose behind enacting Rule 1 of Order 8 in the present form and the context in which the provision is placed, we are of the opinion that the provision has to be construed as directory and not mandatory. In exceptional situations, the court may extend the time for filing the written statement though the period of 30 days and 90 days, referred to in the provision, has expired.

However, we may not be misunderstood as nullifying the entire force and impact -- the entire life and vigour -- of the provision. The delaying tactics adopted by the defendants in law courts are now proverbial as they do stand to gain by delay. This is more so in election disputes because by delaying the trial of election petition, the successful candidate may succeed in enjoying the substantial part, if not in its entirety, the term for which he was elected even though he may lose the battle at the end. Therefore, the judge trying the case must handle the prayer for adjournment with firmness. The defendant seeking extension of time beyond the limits laid down by the provision may not ordinarily be shown indulgence.

Ordinarily, the time schedule prescribed by Order 8 Rule 1 has to be honoured. The defendant should be vigilant. No sooner the writ of summons is served on him he should take steps for drafting his defence and filing the written statement on the appointed date of hearing without waiting for the arrival of the date appointed in the summons for his appearance in the court. The extension of time sought for by the defendant from the court whether within 30 days or 90 days, as the case may be, should not be granted just as a matter of routine and merely for the asking, more so, when the period of 90 days has expired. The extension can be only by way of an exception and for reasons assigned by the defendant and also recorded in writing by the court to its satisfaction. It must be spelled out that a departure from the time schedule prescribed by Order 8 Rule 1 of the Code was being allowed to be made because the circumstances were exceptional, occasioned by reasons beyond the control of the defendant and such extension was required in the interest of justice, and grave injustice would be occasioned if the time was not extended.

A prayer seeking time beyond 90 days for filing the written statement ought to be made in writing. In its judicial discretion exercised on well-settled parameters, the court may indeed put the defendants on terms including imposition of compensatory costs and may also insist on an affidavit, medical certificate or other documentary evidence (depending on the facts and circumstances of a given case) being annexed with the application seeking extension of time so as to convince the court that the prayer was founded on grounds which do exist.

The extension of time shall be only by way of exception and for reasons to be recorded in writing, howsoever brief they may be, by the court. In no case, shall the defendant be permitted to seek extension of time when the court is satisfied that it is a case of laxity or gross negligence on the part of the defendant or his counsel. The court may impose costs for dual purpose:

(i) to deter the defendant from seeking any extension of time just for the asking, and (ii) to compensate the plaintiff for the delay and inconvenience caused to him.

However, no straitjacket formula can be laid down except that the observance of time schedule contemplated by Order 8 Rule 1 shall be the rule and departure therefrom an exception, made for satisfactory reasons only. We hold that Order 8 Rule 1, though couched in mandatory form, is directory being a provision in the domain of processual law."

Two of the five propositions culled out in paragraph 46 of the judgment are also extracted below:

"(iv) The purpose of providing the time schedule for filing the written statement under Order 8 Rule 1 CPC is to expedite and not to scuttle the hearing. The provision spells out a disability on the defendant. It does not impose an embargo on the power of the court to extend the time. Though the language of the proviso to Rule 1 Order 8 CPC is couched in negative form, it does not specify any penal consequences flowing from the non-compliance. The provision being in the domain of the procedural law, it has to be held directory and not mandatory. The power of the court to extend time for filing the written statement beyond the time schedule provided by Order 8 Rule 1 CPC is not completely taken away.

(v) Though Order 8 Rule 1 CPC is a part of procedural law and hence directory, keeping in view the need for expeditious trial of civil causes which persuaded Parliament to enact the provision in its present form, it is held that ordinarily the time schedule contained in the provision is to be followed as a rule and departure therefrom would be by way of exception. A prayer for extension of time made by the defendant shall not be granted just as a matter of routine and merely for the asking, more so when the period of 90 days has expired. Extension of time may be allowed by way of an exception, for reasons to be assigned by the defendant and also be placed on record in writing, howsoever briefly, by the court on its being satisfied. Extension of time may be allowed if it is needed to be given for circumstances which are exceptional, occasioned by reasons beyond the control of the defendant and grave injustice would be occasioned if the time was not extended. Costs may be imposed and affidavit or documents in support of the grounds pleaded by the defendant for extension of time may be demanded, depending on the facts and circumstances of a given case."

In R.N. Jadi & Brothers v. Subhashchandra (supra), this Court reversed an order passed by the Karnataka High Court which set aside the order passed by the trial Court to entertain the written statement filed with delay of two days.

In Mohd. Yusuf's case, this Court set aside the order passed by the High Court which had reversed an order of the trial Court declining to take on record the written statement filed after a time gap of three years from the date of service of summons.

In the present case, the lear

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ned Single Judge did not even bother to advert to the law laid down in Kailash v. Nanhku and the Division Bench refused to interfere with the order only on the ground that application for condonation of delay was filed after a long time gap. In our opinion, this could not be made a ground for declining to entertain the written statement which was filed with a short delay of 6 days. In the result, the appeal is allowed. The impugned order as also the order of the learned Single Judge are set aside. Delay in filing the written statement is condoned subject to payment of cost of Rs.50,000/- to the respondent including Rs.25,000/- already deposited by the appellant in the Registry of this Court pursuant to order dated 9.4.2010. The respondent shall be free to withdraw the amounts of Rs.50,000/- by filing an appropriate application in the Registry of this Court. The appellant shall pay the balance amount of Rs.25,000/- within a period of four weeks from today.
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