Introduction:
It is settled law under the mandate of the Code of Civil Procedure, 1908, that maximum 120 days will be provided for filing of a written statement in a commercial suit. On expiry of 120 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[1]. For regular or non-commercial civil suits, the period for filing the written statement is 90 days from the date of service of summons[2], however, it can be extended at the discretion of the Court.
The Supreme Court clearly outlines timelines for filing of written statements in commercial suits and non-commercial or regular civil suits. Citing SCG Contracts v. K.S. Chamankar Infrastructure Private Limited[3],the Supreme Court in Desh Raj v. Balkishan[4], heldthat the mandatory timeline for filing a written statement applies exclusively to commercial disputes, where courts lack discretion to condone delays. In contrast, for non-commercial disputes, the prescribed timeline is only directory, provided there are sufficient reasons for the delay.
A seminal question for consideration is whether the period outlined for mediation will be excluded from the time period prescribed for filing written statement in both non-commercial disputes and commercial disputes.
Non-commercial suits
With respect to non-commercial disputes, the Delhi High Court in Bharat Singh v. Karan Singh and Ors. (“Bharat Singh”)[5] has recently affirmed the aforesaid and held that the spirit of mediation should not be hampered when the parties are attempting to mediate and settle the dispute, ensuring a just solution acceptable to all parties involved.[6]
Factual Scenario:
The suit was one for partition qua two properties being House No. H-21, First and Second Floor, Green Park Extension, New Delhi- 110016, admeasuring 463 square yards and House No.11, Sector 4, Chandigarh, admeasuring 3,813 square yards (“Suit Properties”) for separate and independent possession of the share of the Plaintiff. Following receipt of legible copies of the plaint and documents by the Defendants on October 03, 2022, the Plaintiff submitted that the matter can be referred to mediation during the course of hearing on November 02, 2022, which was unopposed and referred to Delhi High Court Mediation and Conciliation Centre.
Vide an order dated November 02, 2022, the Hon’ble Court accepted and recorded the joint request made by the Defendants for filing of written statement to be allowed after the mediation proceedings are completed since the matter was being referred to mediation.
However, the mediation proceedings subsequently failed, and this was recorded in the proceedings dated January 24, 2023. Defendant No. 1 filed his written statement on April 09, 2023, and Defendant No. 4 filed the written statement on April 12, 2023. Thereafter, to condone delay in filing of the written statement, the Defendants filed interlocutory applications under Order VIII Rule 1 of CPC, seeking condonation of delay of 74 and 77 days, respectively.
Vide an order dated May 31, 2024, the Ld. Joint Registrar dismissed the applications for condonation of delay and observed that the written statements have been filed beyond the prescribed period as per the provisions of CPC and the Delhi High Court (Original Side) Rules, 2018, and it should be taken off record.
Aggrieved by this order, the present appeals have been filed by the Appellant.
Contention of the Parties
The counsel for Defendant Nos. 1 and 4 (hereinafter known as “Appellant”), primarily made the following submissions:
- Time limit for filing of written statement began from October 03, 2022, when the legible copies were received.
- However, vide an order dated November 02, 2022, the filing of the written statement was deferred until the conclusion of the mediation proceedings and thus, the time for filing of the written statement, which started on October 03, 2022, was halted on November 02, 2022.
- After failure of the mediation talks, timeline for filing written statement recommenced from January 25, 2023, and the written statement was filed up until April 12, 2023, which is within the 120-days period.
On the other hand, the counsel for the Plaintiff made the following contentions:
- Time period given under Clause 4 of Chapter 7 of the Delhi High Court (Original Side) Rules, 2018, disallows filing of written statements beyond the maximum time period of 120 days from the date of service, without exceptions.
- Time spent in mediation does not halt the time period and thus, the written statements filed on November 09, 2023, by Defendant No. 1 and by Defendant No. 4 on April 12, 2023, cannot be permitted to be taken on record.
Findings of the Hon’ble Delhi High Court
The key question is whether the clock for calculating time period for filing written statements stops while parties are in mediation. The Hon’ble Court noted that the time-period for calculating limitation for filing written statement in Delhi High Court is governed by Rules 2 and 4 of Chapter VII of the Delhi High Court (Original Side) Rules, 2018, which gives powers to the Court for extending the time limit for a further period beyond 30 days, but not exceeding a further 90 days.
The Hon’ble Court observed that if parties, that are attempting to mediate and settle the dispute without court intervention, are forced to file written statements, then it would be detrimental to the entire mediation process. The spirit of mediation, which aims to provide just solutions to all parties, will be hampered. It was further submitted that free communication between parties will be curbed, which will lessen the chances of amicable resolution if the parties are legally bound to file a written statement or to complete the pleadings as per the time frame set, even during the mediation process.
Citing the decision of this Hon’ble Court in Telefonaktiebolaget L.M. Ericsson v. Lava International Limited [7] (“Ericsson v. Lava Intl.”), the Hon’ble Bench noted that it is a well settled principle of law that if parties are negotiating settlement during the pendency of a matter, then the Court will condone the delay in filing of written statement due to such settlement talks. The same was thereafter upheld by a co-ordinate bench of this Hon’ble Court in Greaves Cotton Ltd. v. Newage Generators (P) Ltd.[8],which emphasised and encouraged mediation as a mechanism to settle disputes.
This Hon’ble Court also referenced Harjyot Singh v. Manpreet Kaur[9],and observed that the mediation period can be excluded from the 120 days period for filing written statement.
Applying the aforesaid legal principles, the Hon’ble Court decided to exclude the mediation time period from calculating the limitation period, provided that the reasoning given for the delay in filing is valid and reasonable.
The appeals were thereafter disposed of.
Applicability of Bharat Singh vis-à-vis Commercial Suits
Justice Subramonium Prasad had relied on Ericsson v Lava Intl,in his Bharat Singh judgment, a suit that was later transferred to the commercial division of the Delhi High Court, which was constituted from November 15, 2015. An exemption was provided under the Commercial Courts Ordinance for such matters that were filed prior to the notification of the Ordinance, whereby the Court had the discretion to set a case management timeline and extend the time period for completion of pleadings, including the written statement. In this background, the Court had excluded the time period for amicable settlement from the period provided for filing of written statement. It was noted that even otherwise, it is a well settled principle of law that if parties are negotiating settlement during the pendency of a matter, then the Court will condone the delay in filing of written statement due to such settlement talks. However, it is also pertinent to note that the Court further stated that the present suit squarely falls under the said exemption and this Court has the discretion to provide for extended timelines for completion of pleadings as per the prior statute. The prescribed period of 120 days’ timeline will be applicable in cases filed subsequent to the notification of the Ordinance and the same is not applicable in the present case.
However, upon the introduction of the Commercial Courts Act, 2015 (“CCA”), while a separate provision was carved out for pre-institution mediation (Section 12A of CCA), there seems to be an opportunity to bridge the gap in caselaw for filing of written statement where mediation has started post institution of the commercial suit.
Conclusion
With respect to non-commercial suits, the Bharat Singh judgment holds significant importance and serves as a progressive step for non-commercial or regular civil disputes.
By excluding the mediation period from the timeline prescribed for filing of written statement in non-commercial disputes, the Delhi High Court’s decision reinforces India’s commitment to fostering alternative dispute resolution mechanisms, particularly mediation, as a viable means of resolving disputes efficiently. This ruling aligns with the legislative intent of promoting out of court settlements and reducing the burden on courts.
This decision comes against the backdrop of an increasingly evolving legal framework, including the introduction of the Mediation Act, 2023, which institutionalises mediation and emphasises its role in commercial and civil disputes. It ensures that parties are not penalised for engaging in mediation due to procedural constraints and strengthens the credibility of amicable settlements outside courtrooms. However, whether other High Courts in India will follow suit or deviate from the Delhi High Court’s view remains to be seen.
Interestingly, in commercial disputes, especially following the inclusion of Section 12A in CCA, which mandates compulsory pre-institution mediation in commercial suit of specified value, which is without an urgent interim relief application, the option of mediation has already been envisaged, so the question of further extension in the court process may not arise. However, the law remains unclear on post institution mediation in commercial suits. It will be interesting to see if the strict timelines prescribed are followed, or an exception is carved out, keeping in mind the purpose and effectiveness of mediation in conflict resolution, and to save precious judicial time.
For further information, please contact:
Vikash Kumar Jha, Partner, Cyril Amarchand Mangaldas
vikashkumar.jha@cyrilshroff.com
[1] 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.
[2] 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 same on such other day, as may be specified by the Court, for reasons to be recorded in writing, but which shall not be later than ninety days from the date of service of summons.
[3] SCG Contracts v. K.S. Chamankar Infrastructure Private Limited (2019) 12 SCC 210
[4] Desh Raj v. Balkishan, (2020) 2 SCC 708
[5] Single Bench comprising of Justice Subramonium Prasad
[6] Bharat Singh v. Karan Singh & Ors. CS(OS) 427/2022
[7] Telefonaktiebolaget L.M. Ericsson v. Lava International Limited, 2015 SCC Online Del 13903
[8] Greaves Cotton Ltd. v. Newage Generators (P) Ltd., 2019 SCC OnLine Del 6556
[9] Harjyot Singh v. Manpreet Kaur, 2021 SCC OnLine Del 2629
