Plaintiff Must File Written Statement To Counter-Claim In Commercial Suit Within 120 Days: Supreme Court
The Court held that the strict 120-day limit under Order VIII Rule 1 CPC, as applicable to commercial suits, applies not only to a defendant’s written statement but also to a plaintiff’s written statement in answer to a defendant’s counter-claim.
The Supreme Court has held that a plaintiff in a commercial suit must file a written statement to a defendant’s counter-claim within the same mandatory outer limit of 120 days prescribed under Order VIII Rule 1 CPC, as applicable through the Commercial Courts Act, 2015.
The Court was hearing appeals arising from a commercial recovery suit in which the plaintiffs sought leave to file their written statement in response to the defendants' counterclaim after 238 days. The Calcutta High Court had refused to take the belated written statement on record, and the Commercial Appellate Division had dismissed the appeal both on maintainability and merits.
A Bench of Justice Sanjay Kumar and Justice K. Vinod Chandran dismissed the appeals, holding that Order VIII Rule 6G CPC applies the rules relating to a defendant’s written statement to a plaintiff’s written statement in answer to a counter-claim.
The Bench held: “A plaintiff in a commercial suit, governed by the CC Act, is bound by the mandate of the proviso to Order VIII Rule 1 CPC, as applicable to a commercial suit, and must file a written statement to a counter-claim by a defendant therein, ordinarily within 30 days from the date of service of summons or receipt of the counter-claim, and in the event a plaintiff fails to file such a written statement within that time but offers sufficient cause for the delay, the Court may extend the time to do so, for reasons to be recorded in writing and upon payment of appropriate costs, but not beyond 120 days from the date of service of summons upon the plaintiff/receipt of the counter-claim by the plaintiff.”
Senior Advocate Jaideep Gupta appeared for the appellants, while Senior Advocate Rauf Rahim appeared for the respondents.
Background
The plaintiffs had supplied printing paper to the defendants and later filed a recovery suit after disputes arose regarding payment. The contesting defendants filed a written statement and raised a counterclaim. Copies of the written statement and counter-claim were served on the plaintiffs’ Advocate-on-Record.
The plaintiffs, however, sought leave to file their written statement in response to the counterclaim only after 238 days. The Commercial Division refused permission, holding that Order VIII Rule 6G CPC extended the timeline applicable to a defendant’s written statement to a written statement filed in answer to a counter-claim. The Commercial Appellate Division also dismissed the plaintiffs’ appeal.
Before the Supreme Court, the plaintiffs argued that the 120-day limit applicable to defendants in commercial suits could not be applied to plaintiffs replying to counter-claims, especially when no time had been fixed by the Court under Order VIII Rule 6A(3) CPC.
Court’s Observation
The Court began by examining the structure of Order VIII CPC. It noted that a counter-claim permits a defendant to raise an independent claim against the plaintiff in the same suit, thereby avoiding multiplicity of proceedings.
The Court observed: “Thus, a counter-claim filed by a defendant in a suit is on par with a plaint, insofar as such defendant’s claim is concerned, and the reply thereto filed by the plaintiff is nothing other than his written statement in response thereto. Order VIII Rule 6E CPC is relevant in this regard. It deals with default of a plaintiff in replying to a counter-claim and states that, if the plaintiff makes a default in putting in a reply to the counter-claim made by the defendant, the Court may pronounce judgment against the plaintiff in relation to the counter-claim made against him or make such order in relation to the counter-claim as it thinks fit. Order VIII Rule 6G CPC is also of relevance. Titled ‘Rules relating to written statement to apply’, it states that the rules relating to a written statement by a defendant shall apply to a written statement filed in answer to a counter-claim.”
The Court relied on SCG Contracts (India) Private Limited v. K.S. Chamankar Infrastructure Private Limited (2019) for the proposition that, in commercial suits, failure to file a written statement within 120 days entails forfeiture of the right and the Court cannot take it on record thereafter.
The Court examined the object of the Commercial Courts Act and noted that its purpose was to ensure speedy disposal of high-value commercial disputes by improving efficiency and reducing delay.
The Court stated: “… The proviso to Order VIII Rule 1 CPC was amended in its application to a commercial suit, so as to provide more time to a defendant therein, when compared to a regular suit, but with the caveat that in the event such defendant did not file a written statement within the extended period of 120 days, on payment of the costs imposed, the very right to file a written statement would stand forfeited with no possibility of turning the clock back. The proviso to Order VIII Rule 10 CPC emphasizes this by affirming that no Court shall make an order to extend the time provided under Order VIII Rule 1 CPC for filing of the written statement. Logically, similar time constraints have to be applied to filing of a written statement by a plaintiff in such a suit to a counter-claim raised by a defendant therein so as to maintain a strict time schedule to facilitate prompt disposal of such suit. Order VIII Rule 6G CPC achieves that purpose.”
The Court disagreed with the Bombay High Court's view that Order VIII Rule 6G CPC applies only to the contents of a written statement to a counter-claim and not to the time limit for filing it.
The Bench underscored: “We, therefore, do not agree with the view taken by the Bombay High Court that the ‘rules’ referred to in Order VIII Rule 6G CPC only relate to the contents of a written statement to a counter-claim and have nothing to do with the time limit for filing of such written statement. The phrasing of Order VIII Rule 6G does not allow for any such restriction being read into the provision. It unequivocally speaks of application of the rules relating to a written statement by a defendant to a written statement that is to be filed in answer to a counter-claim also. In the context of a commercial suit governed by the CC Act, designed for quicker resolution of commercial disputes, extending the strict temporal requirement relating to the filing of a written statement by a defendant to the filing of a written statement to a counter-claim is rational, as it achieves the same purpose, viz., speedy and timely completion of the pleadings in the suit so as to enable its faster disposal.”
The Court also rejected the view that the clock starts only when the Court expressly fixes time under Order VIII Rule 6A(3) CPC. It held that where no time is fixed, Order VIII Rule 6G read with Order VIII Rule 1 supplies the outer limit.
The Court stated: “Order VIII Rule 6A(3) CPC, no doubt, enables the Court to fix the time for the plaintiff to file a written statement to a counter-claim, but in the absence of time being fixed thereunder, Rule 6G of Order VIII kicks in and applies the proviso to Rule 1 thereof so as to set the temporal outer limit, beyond which such a written statement cannot be filed. To interpret the provisions otherwise would render one or the other unworkable apart from doing violence to the aims of the CC Act.”
The Court also considered whether the plaintiffs’ appeal before the Commercial Appellate Division was maintainable under Section 13 of the Commercial Courts Act. Referring to BGS SGS SOMA JV v. NHPC Limited (2020) and Kandla Export Corporation v. OCI Corporation (2018), the Court held that appeals under Section 13 are confined to orders specifically enumerated under Order XLIII CPC or Section 37 of the Arbitration and Conciliation Act, 1996.
The Court observed: “In the light of the above statutory scheme and the decisions of this Court referred to hereinabove, it is clear that an appeal would lie under Section 13(1A) only if the order sought to be appealed against finds mention either in Order XLIII CPC or Section 37 of the Arbitration and Conciliation Act, 1996. As an order passed under Order VIII CPC is not appealable under Order XLIII CPC, the question of the plaintiffs maintaining an appeal against the order of the learned Judge denying them leave to file a belated written statement to the counter-claim raised by the contesting defendants does not arise. Thus, the Division Bench committed no error in holding that the appeal, apart from being devoid of merit, was not even maintainable.”
Conclusion
The Supreme Court held that the High Court was justified in refusing leave to file the belated written statement to the counter-claim. It dismissed the appeals, vacated the interim stay on the commercial suit, dismissed pending applications and directed parties to bear their own costs.
Cause Title: A.K. Ghosh & Company and others v. Biman Bose and others (Neutral Citation: 2026 INSC 684)
Appearances
Petitioners: Senior Advocate Jaideep Gupta, with Advocates Soumitra Ghose Chowdhuri, Suryanu Sengupta, Siddhant Upmanyu, Riddhi Bose, Racheeta Chawla, Sampriti Baksi and Rishi Agarwal; Soumya Dutta, AOR
Respondents: Senior Advocate Rauf Rahim, with Advocates Indranil Ghosh, Palzer Moktan, Mujadid Gilani, Ali Asghar Rahim, Tania Tamannah and Mohsin Rahim; Aanchal Tikmani, AOR
