Defendant Has Right To Cross Examine Plaintiff Witnesses Even If He Has Not Filed Written Statement: Supreme Court

The Appeal, before the Apex Court, was directed against the judgment of the Karnataka High Court, which affirmed the Judgement of the Additional City Civil & Sessions Judge (Exclusive Commercial Court) in a suit filed by the first Respondent- M/s. Aroush Motors for the recovery of a certain amount of money.

The Division Bench of Justice Aravind Kumar and Justice N.V. Anjaria held, “The purpose of cross-examination is to elicit the truth from the witness and impeach its credibility. When the WS was not allowed to be taken on record, ...the right to crossexamine cannot be taken away by leaving the defendant in lurch and this has acted as final nail in the coffin to defendant’s right of defence.”

Reference was made to the judgment in Ranjit Singh v. State of Uttarakhand (2024), wherein it has been held that even when the defendant has not filed the written statement, his right to cross-examine the plaintiff witnesses is not foreclosed.

Advocate Sughosh Subramanyam represented the Appellant while AOR Balaji Srinivasan represented the Respondent.

Factual Background

The first Defendant- M/s. Anvita Auto Tech Works Pvt. Ltd. (Appellant), launched a flagship motorcycle by the name of CFMOTO in India in 2019 and invited applications for its dealership across the country, including Bengaluru City. The Plaintiff-M/s. Aroush Motors (first Respondent) was provisionally appointed a dealer under a Letter of Intent. In consideration of the dealership, the plaintiff remitted a sum of Rs 20 lakh towards security deposit to the first Defendant, incurred expenditure of rent and interiors for setting up a showroom. Further, the plaintiff paid a sum of Rs 70 lakh towards spare parts, software, equipment and initial stock of motorcycles. Some additional amount was paid.

The first defendant supplied 19 motorbikes of BSIV Category to the Plaintiff, out of which 8 were sold. In 2020, the Government imposed a ban on the sale of BS-IV Category vehicles. As such, the first Defendant prohibited the sale of such motorcycles but promised to supply Kits and Equipment to upgrade the motorcycles to BS-VI Category. Nevertheless, due to the inability of the first Defendant to supply the same, the plaintiff’s business was stalled and he was said to have sustained substantial loss, following which, the plaintiff terminated the dealership of the first Defendant alleging breach of obligations and sought recovery of monies invested by way of filing a Commercial Original Suit claiming a sum of Rs. 1,78,03,090 from the first Defendant with Interest. The first defendant being aggrieved by the judgement of the Trial Court preferred Commercial Appeal which came to be dismissed by the Impugned Order. Hence, the present appeal came to be filed.

Reasoning

The Bench explained that the law regarding the mandatory filing of Written Statement in a commercial dispute within the statutory period is envisaged under Proviso to sub-rule (1) of Rule 1 of Order VIII Code of Civil Procedure, 1908 (CPC) and Second Proviso to Sub-rule (1) of Rule 1 of Order V CPC as amended by the Special Amendment under the Commercial Courts Act, 2015.

On the aspect of the mandatory nature of the statutory period in filing WS in a commercial dispute, the Bench referred to the decision in SCG Contracts (India) Pvt. Ltd. v. K.S. Chamankar Infrastructure Private Limited and Ors. (2019) wherein this court held that the timeline of 120 days’ fixed by the statute is not directory but rather mandatory, and the commercial courts cannot condone the delay beyond 120 days in filing the WS.

Considering that the meticulous scrutiny of the chronological chart showed that the limitation period for filing the WS commenced on July 17, 2021 and ended on November 14, 2021, the Bench noted that both these dates fell at a time when our nation was in garb of global pandemic of COVID-19 which affected the lives of millions of people around the world as well our judicial systems. It was also noticed that In Re: Cognizance for Extension of Limitation (2022), the Court passed a series of orders to exclude the period commencing from March 15, 2020, till February 28, 2022, for the purpose of computing the limitation period under any general or special laws in respect of all judicial or quasi-judicial proceedings.

The Bench found that on November 24, 2021, the first defendant had filed an application seeking enlargement of time to file a written submission and subsequently on January 7, 2022 he had filed an application seeking permission to file the written submission enclosing the written submission also. “Therefore, the High Court ought to have excluded the aforesaid period for the purpose of filing the written statement and ought to have permitted the defendant No.1 to file written statement on record and contest the suit on merits rather than dismissing the appeal”, it held.

Allowing the appeal, the Bench set aside the impugned judgment and remanded the matter back to the trial court to dispose of the same after allowing the appellant to file the Written Statement, subject to payment of costs to the tune of Rs 1 lakh and to permit the appellant to exercise his right of cross-examination of the plaintiff’s witnesses. “The trial court is requested to dispose of the present commercial suit expeditiously and preferably within a period of Six (6) months from today”, it concluded.

Cause Title: M/s Anvita Auto Tech Works Pvt. Ltd. v. M/s Aroush Motors (Neutral Citation: 2025 INSC 1202)

Appearance

Appellant: Advocates Sughosh Subramanyam, Kartik Pant, Sanskruti Samal, AOR Chaitanya

Respondent: AOR Balaji Srinivasan, Advocates Vishwaditya Sharma, Harsha Tripathi, Kanishka Singh, Subornadeep Bhattacharjee, Suraj Sampath, K. Shiva, Aakriti Priya

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