DESH RAJversusBALKISHAN (D) THROUGH PROPOSED LR MS. ROHINI

14                       [2020]
              SUPREME COURT     5 S.C.R. 14
                             REPORTS                       [2020] 5 S.C.R.


A                                 DESH RAJ
                                       v.
       BALKISHAN (D) THROUGH PROPOSED LR MS. ROHINI
                        (Civil Appeal No. 433 of 2020)
B                             JANUARY 20, 2020
       [S. A. BOBDE, CJI, B.R. GAVAI AND SURYA KANT, JJ.]
            Code of Civil Procedure, 1908 – Or. VIII, r. 1 – Timeline for
     filing written statement in non-commercial disputes – Agreement to
C    sell entered on 17.03.2017 between the appellant and the
     respondent, who are brothers, for sale of one floor of the ancestral
     property for Rs. 7.5 lakhs – Rs.1 lakh paid as earnest money to
     the appellant – Agreement not honoured – Respondent filed suit
     inter alia for specific performance – Appellant’s opportunity of filing
     written statement was closed and defence struck off owing to
D    repeated delays and non-adherence of deadlines – High Court
     summarily dismissed the petition relying upon it’s order in one Oku
     Tech case which was rendered in the context of a commercial
     dispute qua Or.VIII, r.1 as amended by the Commercial Courts Act,
     2015 – Held: Counsel for the respondent has not contested the
E    non-commercial nature of the dispute – Dispute does not fall within
     the parameters specified u/s.2(c) of the 2015 Act and in particular
     sub-clause (vii), as the immovable property here is not of a nature
     which is “used exclusively in trade or commerce”– High Court
     overlooked the nature of the dispute and mistakenly applied the
     ratio of a case rendered in light of modified version of the CPC
F
     applicable only to commercial disputes – Further, numerous
     opportunities were accorded to the appellant – He was served on
     01.05.2017 – It was only on 02.11.2017, after delay of 95 days
     post the maximum extendable period under the Proviso of Or. VIII,
     r.1 that the appellant claimed to have filed his written statement –
G    Only defence taken to the repeated and blatant lapses is that the
     appellant’s counsel was not turning up – Appellant is seeking
     condonation in a casual manner – This ought not to be permitted
     or encouraged – Although the unamended Or.VIII, r.1 is directory,
     it cannot be interpreted to bestow free hand to any litigant/lawyer
H    to file written statement at their own sweet-will– Legislative
                                       14
           DESH RAJ v. BALKISHAN (D) THROUGH                          15
                PROPOSED LR MS. ROHINI

objective behind prescription of timelines under the CPC must be      A
given due weightage so that disputes are resolved in time-bound
manner – Appellant failed to give or even attempt to proffer any
cogent reason for the delay, though he is right that the High Court
erroneously relied upon the ratio of Oku Tech – Lenient view taken
in the unique circumstances of the case – Discretion exercised not    B
a precedent – Written statement filed by the appellant on
02.11.2017 (as claimed), be taken on record with a copy to counsel
for the respondent within one week from today, subject to payment
of costs of Rs.25,000/- to the respondent – Orders of the courts
below set aside – Commercial Courts Act, 2015 – ss.2(c) and 16.
                                                                      C
      Commercial Courts Act, 2015 – ss.2(c) and 16 – Amendment
of CPC in its application to commercial disputes – Held: Post
coming into force of the said Act, there are two regimes of civil
procedure wherein commercial disputes [as defined u/s.2(c) of the
said Act] are governed by the CPC as amended by s.16 of the said
Act; all other non-commercial disputes fall within the ambit of the   D
unamended/original provisions of CPC – Code of Civil Procedure,
1908 – Or. VIII, r. 1.
      Disposing of the appeal, the Court
      HELD: 1.1 The Commercial Courts Act, 2015 through               E
Section 16 has amended the CPC in its application to
commercial disputes. Hence, it is clear that post coming into
force of the aforesaid Act, there are two regimes of civil
procedure. Whereas commercial disputes [as defined under
Section 2(c) of the Commercial Courts Act, 2015] are governed
by the CPC as amended by Section 16 of the said Act; all other        F
non-commercial disputes fall within the ambit of the unamended
(or original) provisions of CPC. Counsel for respondent has not
contested the non-commercial nature of the dispute, and even
independently the Court is satisfied that the dispute does not
fall within the parameters specified under Section 2(c) of the        G
Commercial Courts Act, 2015 and in particular sub-clause (vii),
as the immovable property here is not of a nature which is “used
exclusively in trade or commerce”. Hence, the appellant is correct
in contending that the High Court overlooked the nature of the
dispute and mistakenly applied the ratio of a case rendered in
                                                                      H
16            SUPREME COURT REPORTS                      [2020] 5 S.C.R.


A    light of a modified version of the Code of Civil Procedure, which
     would only be applicable to commercial disputes. [Paras 11, 12
     & 14] [20-D-E; 21-A-B; 21-E-H]
           Atcom Technologies Ltd. v. Y.A. Chunawala and Co.
           (2018) 6 SCC 639 – relied on.
B
            1.2 Although the unamended Order VIII Rule 1 of CPC
     is directory, it cannot be interpreted to bestow a free hand on
     any litigant or lawyer to file written statement at their own sweet-
     will and/or to prolong the lis. The legislative objective behind
     prescription of timelines under the CPC must be given due
C    weightage so that the disputes are resolved in a time-bound
     manner. Inherent discretion of Courts, like the ability to condone
     delays under Order VIII Rule 1 is a fairly defined concept and
     its contours have been shaped through judicial decisions over
     the ages. Illustratively, extreme hardship or delays occurring
D    due to factors beyond control of parties despite proactive
     diligence, may be just and equitable instances for condonation
     of delay. Numerous opportunities had been accorded to the
     appellant. He was served on 01.05.2017 and entered appearance
     through counsel on 15.05.2017. As per Order VIII Rule I of CPC,
E    the appellant ideally ought to have filed his written statement
     by 31.05.2017; and at the very latest by 30.07.2017. In addition
     to two separate deadlines for filing of the written statement
     within the 90-day timeframe prescribed by the ‘original’ Order
     VIII Rule 1, the Civil Court even post expiry of the 90-day
     period again gave one last and final opportunity on 18.09.2017
F
     subject to payment of costs of Rs 3,000. None of these deadlines
     were complied with. Even on 11.10.2017, when the Court finally
     closed the appellant’s ability to file written statement and struck-
     off his defence from the record, no attempt was made to comply
     with the process of law. It was only on 02.11.2017, after a delay
G    of 95 days post the maximum extendable period under the
     Proviso of Order VIII Rule 1, CPC that the appellant claimed
     to have filed his written statement. Curiously however, even by
     the next hearing on 03.11.2017, the appellant had failed to
     provide a copy of the written statement to the respondent as
H    had been noted by the Civil Court. [Paras 16-18] [22-A-G]
          DESH RAJ v. BALKISHAN (D) THROUGH                        17
               PROPOSED LR MS. ROHINI

      1.3 The only defence taken to these repeated and blatant     A
lapses is that the appellant’s counsel was not turning up. No
attempt has been made to even proffer a reasoned justification
or explanation, and it is clear that appellant is seeking
condonation in a casual manner. This ought not to be permitted
or encouraged. Nothing prevented the appellant from filing the
written statement through counsel or in person. He has, thus,      B
failed to give any cogent reason for the delay and is unable to
satisfy due diligence on his part though he is right in his
submission that the High Court erroneously relied upon the ratio
of Oku Tech. Having held so, there could be no escape but to
dismiss this appeal. However, taking a lenient view given the      C
unique circumstances of the case, and without laying down the
discretion being exercised hereinafter, as a precedent, it is
directed that the written statement filed by the appellant on
02.11.2017 (as claimed), be taken on record with a copy to
counsel for the respondent within one week from today and
further subject to payment of costs of Rs. 25,000/- to the         D
respondent. The orders of the courts below are thus set aside
and the appeal is disposed of in the above terms. [Paras 19,
21, 23] [22-G-H; 23-A-E]
     Oku Tech Pvt Ltd v. Sangeet Agarwal and Others
     (2016) SCC OnLine Del 6601; Salem Advocate Bar                E
     Association, T.N. v. Union of India (2005) 6 SCC
     344 : [2005] 1 Suppl. SCR 929; M/s SCG Contracts
     India Pvt. Ltd. v. KS Chamankar Infrastructure Pvt. Ltd.
     & Ors. AIR 2019 SC 2691 – referred to.
                     Case Law Reference                            F
[2005] 1 Suppl. SCR 929         referred to           Para 8
AIR 2019 SC 2691                 referred to          Para 13
(2018) 6 SCC 639                 relied on            Para 14
      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 433
                                                                   G
of 2020.
      From the Judgment and Order dated 26.11.2018 of the High
Court of Delhi at New Delhi in CM(M) No. 1370 of 2018.
     Anilendra Pandey, Adv. for the Appellant.
     Ms. Aparna Jha, Adv. for the Respondent.                      H
18            SUPREME COURT REPORTS                           [2020] 5 S.C.R.


A          The following Judgment of the Court was delivered:
                                  JUDGMENT
           1. Leave granted.
           2. This Civil Appeal is directed against order dated 26.11.2018
B    passed by the Delhi High Court whereby appellant’s revision petition
     against the order of the Civil Court which closed his right to file written
     statement under Order VIII Rule 1 of the Code of Civil Procedure,
     1908 (hereinafter “CPC”) and struck-off his defence owing to repeated
     delays and non-adherence of prescribed deadlines, has been dismissed.

C          FACTS
            3. The appellant and the respondent are brothers and own one
     floor each of ancestral property bearing No. 142 in Devli Village, Delhi.
     The ground floor was possessed and owned by the respondent, whereas
     the first floor was in the name of the appellant.
D           4. It has been claimed that in February 2017, the respondent
     approached the appellant offering to purchase the first floor of the
     ancestral property. Subsequently, an agreement to sell was entered into
     between the parties on 17.03.2017 for total consideration of Rs 7.5
     lakhs, of which an amount of Rs 1 lakh was paid as earnest money to
     the appellant. This agreement was subsequently not honoured and a
E
     legal notice was served upon the appellant by the respondent on
     13.04.2017, calling upon him to accept consideration and perform his
     part of the contract.
           5. Claiming that the appellant was attempting to sell the suit
     property to third parties, the respondent later approached the Civil Court
F
     praying for a decree of specific performance of the agreement to sell
     dated 17.03.2017 by directing the appellant to receive the balance sale
     consideration and execute/register the sale deed in favour of the
     respondent. Additionally, the respondent sought to permanently injunct
     the appellant from alienating the property in favour of any third party.
G    Alternatively, recovery of damages of Rs 2 lakhs with pendent lite and
     future interest @ 18% per annum was sought by the respondent.
            6. The appellant was served on 01.05.2017, and he appeared
     through counsel on 15.05.2017 wherein the Civil Court granted the
     appellant 30 days to file his written statement. On 17.07.2017, noting
H    that no written statement had been filed till then, the Court granted the
               DESH RAJ v. BALKISHAN (D) THROUGH                             19
                    PROPOSED LR MS. ROHINI

appellant a final opportunity of two weeks to file his written statement.    A
On 18.09.2017, the Court observed that despite the last opportunity
having been accorded more than two months ago, no written statement
had been filed. Nevertheless, the Court granted another final opportunity,
subject to payment of Rs 3,000 costs and the matter was posted for
11.10.2017. On this date, appellant sought multiple pass overs but his
                                                                             B
Counsel did not appear before the Court. After noticing that despite
several opportunities (including one beyond the maximum period of 90
days) the appellant had failed to file any written statement or deposit
costs and that the matter could not be adjourned repeatedly, the Civil
Court thus closed the appellant’s opportunity of filing written statement
and struck off his defence. Even on the next hearing on 03.11.2017,          C
the appellant’s Counsel did not appear or supply a copy of the written
statement to the respondent, as noted in the Trial Court’s daily order.
      7. The aggrieved appellant approached the High Court in revision,
which noted how he had been granted repeated opportunities and yet
the written statement was not filed within 120 days of notice. Relying       D
upon the order of its co-ordinate bench in Oku Tech Pvt Ltd v. Sangeet
Agarwal and Others1 wherein it was held that there was no discretion
with courts to extend the time for filing the written statement beyond
120 days after service of summons, the Delhi High Court summarily
dismissed the petition.
                                                                             E
         CONTENTIONS OF PARTIES
       8. The appellant’s primary contention is that the reliance on Oku
Tech (supra) was erroneous as it was rendered in light of Order VIII
Rule 1 of CPC as amended by the Commercial Courts Act, 2015 which
in turn was applicable to commercial disputes only. The present matter
                                                                             F
was highlighted as being non-commercial, and it was urged that the un-
amended Order VIII Rule 1 of CPC would be applicable, wherein no
consequences for not complying with the shorter timeline of 90 days
has been provided. This provision, it was contended, was merely
procedural and concomitantly directory as held by this Court in various
decisions including Salem Advocate Bar Association, T.N. v. Union            G
of India2.
      9. Given this, the appellant put forth his contention that the
deadline of 90 days could be relaxed keeping in view the facts and
1
    2016 SCC OnLine Del 6601.
2
    (2005) 6 SCC 344.                                                        H
20             SUPREME COURT REPORTS                           [2020] 5 S.C.R.


A    circumstances of a case; and argued that he himself had personally
     appeared on all dates of hearing and the lapse was on the part of his
     Counsel, due to which written statement could not be filed. The appellant
     claims that severe prejudice would be caused to him if the delay is not
     condoned for he would be left defenceless in the civil suit. He
     accordingly seeks that this Court invoke its inherent discretion under
B
     Order VIII Rule 1 of CPC and grant one final opportunity to file his
     written statement.
            10. This was opposed on behalf of the respondent who asserted
     that multiple chances had already been granted to the appellant by the
     Civil Court, including opportunities beyond the maximum statutory period
C
     of 90 days as provided for filing of written statement under Order VIII
     Rule I of CPC. It was argued that continued failure to adhere to the
     multiple deadlines set by the Civil Court and violation of Court directions,
     was evidence of gross negligence on part of the appellant at best, and
     a deliberate delaying tactic and abuse of the process of law at the worst.
D
           ANALYSIS & CONCLUSION
           11. At the outset, it must be noted that the Commercial Courts
     Act, 2015 through Section 16 has amended the CPC in its application
     to commercial disputes to provide as follows:
E          “16. Amendments to the Code of Civil Procedure, 1908 in
           its application to commercial disputes.—(1) The provisions
           of the Code of Civil Procedure, 1908 (5 of 1908) shall, in
           their application to any suit in respect of a commercial
           dispute of a Specified Value, stand amended in the manner
F          as specified in the Schedule.
           (2) The Commercial Division and Commercial Court shall
           follow the provisions of the Code of Civil Procedure, 1908
           (5 of 1908), as amended by this Act, in the trial of a suit in
           respect of a commercial dispute of a specified value.
G          (3) Where any provision of any Rule of the jurisdictional
           High Court or any amendment to the Code of Civil
           Procedure, 1908, by the State Government is in conflict with
           the provisions of the Code of Civil Procedure, 1908 (5 of
           1908), as amended by this Act, the provisions of the Code
H          of Civil Procedure as amended by this Act shall prevail.”
              DESH RAJ v. BALKISHAN (D) THROUGH                               21
                   PROPOSED LR MS. ROHINI

      12. Hence, it is clear that post coming into force of the aforesaid     A
Act, there are two regimes of civil procedure. Whereas commercial
disputes [as defined under Section 2(c) of the Commercial Courts Act,
2015] are governed by the CPC as amended by Section 16 of the said
Act; all other non-commercial disputes fall within the ambit of the
unamended (or original) provisions of CPC.
                                                                              B
       13. The judgment of Oku Tech (supra) relied upon the learned
Single Judge is no doubt good law, as recently upheld by this Court in
SCG Contracts India Pvt. Ltd. v. KS Chamankar Infrastructure
Pvt. Ltd.,3 but its ratio concerning the mandatory nature of the timeline
prescribed for filing of written statement and the lack of discretion with
Courts to condone any delay is applicable only to commercial disputes,        C
as the judgment was undoubtedly rendered in the context of a
commercial dispute qua the amended Order VIII Rule 1 CPC.
       14. As regard the timeline for filing of written statement in a non-
commercial dispute, the observations of this Court in a catena of
decisions, most recently in Atcom Technologies Ltd. v. Y.A.                   D
Chunawala and Co.,4 holds the field. Unamended Order VIII Rule I,
CPC continues to be directory and does not do away with the inherent
discretion of Courts to condone certain delays.
       15. Let us, therefore, consider whether the appellant has made
out a case of exercising such discretionary jurisdiction? The present         E
civil suit had been filed by the respondent for a decree of specific
performance of an agreement to sell one floor of an ancestral property
located in Devli Village, Delhi and permanent injunction against
alienation of the same by petitioner to third parties. Counsel for
respondent has not contested the non-commercial nature of the dispute,        F
and even independently we are satisfied that the dispute does not fall
within the parameters specified under Section 2(c) of the Commercial
Courts Act, 2015 and in particular sub-clause (vii), as the immovable
property here is not of a nature which is “used exclusively in trade
or commerce”. Hence, the appellant is correct in contending that the
High Court overlooked the nature of the dispute and mistakenly applied        G
the ratio of a case rendered in light of a modified version of the Code
of Civil Procedure, which would only be applicable to commercial
disputes.
3
    AIR 2019 SC 2691.
4
    (2018) 6 SCC 639.                                                         H
22            SUPREME COURT REPORTS                           [2020] 5 S.C.R.


A           16. However, it would be gainsaid that although the unamended
     Order VIII Rule 1 of CPC is directory, it cannot be interpreted to bestow
     a free hand to on any litigant or lawyer to file written statement at their
     own sweet-will and/or to prolong the lis. The legislative objective behind
     prescription of timelines under the CPC must be given due weightage
B    so that the disputes are resolved in a time-bound manner. Inherent
     discretion of Courts, like the ability to condone delays under Order VIII
     Rule 1 is a fairly defined concept and its contours have been shaped
     through judicial decisions over the ages. Illustratively, extreme hardship
     or delays occurring due to factors beyond control of parties despite
     proactive diligence, may be just and equitable instances for condonation
C    of delay.
            17. However, it is clear from the facts on record that numerous
     opportunities had been accorded to the appellant. He was served on
     01.05.2017 and entered appearance through counsel on 15.05.2017. As
     per Order VIII Rule I of CPC, the appellant ideally ought to have filed
D    his written statement by 31.05.2017; and at the very latest by
     30.07.2017. In addition to two separate deadlines for filing of the written
     statement within the 90-day timeframe prescribed by the ‘original’ Order
     VIII Rule 1, the Civil Court even post expiry of the 90-day period again
     gave one last and final opportunity on 18.09.2017 subject to payment
E    of costs of Rs 3,000. None of these deadlines were complied with. Even
     on 11.10.2017, when the Court finally closed the appellant’s ability to
     file written statement and struck-off his defence from the record, no
     attempt was made to comply with the process of law.
           18. It was only on 02.11.2017, after a delay of 95 days post the
F    maximum extendable period under the Proviso of Order VIII Rule 1,
     CPC that the appellant claimed to have filed his written statement.
     Curiously however, even by the next hearing on 03.11.2017, the appellant
     had failed to provide a copy of the written statement to the respondent
     as had been noted by the Civil Court.
G            19. The only defence taken to these repeated and blatant lapses
     is that the appellant’s counsel was not turning up. No attempt has been
     made to even proffer a reasoned justification or explanation, and it is
     clear that appellant is seeking condonation in a casual manner. This ought
     not to be permitted or encouraged. Courts must act stringently to ensure
H    that all proceedings are decided within reasonable time, and it is but
               DESH RAJ v. BALKISHAN (D) THROUGH                               23
                    PROPOSED LR MS. ROHINI

the duty of the judicial system to cultivate a culture of respecting           A
deadlines and time of the Court, its officers as well as of adversaries.
      20. Routine condonations and cavalier attitudes towards the
process of law affects the administration of justice. It affects docket
management of Courts and causes avoidable delays, cost escalations
and chaos. The effect of this is borne not only by the litigants, but also     B
commerce in the country and the public-in-general who spend decades
mired in technical processes.
       21. It is obvious from the record that nothing prevented the
appellant from filing the written statement through counsel or in person.
He has, thus, failed to give any cogent reason for the delay and is unable     C
to satisfy due diligence on his part though he is right in his submission
that the High Court erroneously relied upon the ratio of Oku Tech
(supra).
      22. Having held so, there could be no escape but to dismiss this
appeal. However, taking a lenient view given the unique circumstances          D
of the case, and without laying down the discretion being exercised
hereinafter, as a precedent, we direct that the written statement filed
by the appellant on 02.11.2017 (as claimed), be taken on record with a
copy to counsel for the respondent within one week from today and
further subject to payment of costs of Rs. 25,000/- to the respondent.
                                                                               E
      23. The orders of the courts below are thus set aside and the
appeal is disposed of in the above terms.


Divya Pandey                                             Appeal disposed of.
                                                                               F




                                                                               G




                                                                               H