Peoples Empowernment Group Through Its ... vs Mr. Sachin Sonawane And Ors

2025:BHC-AS:11322 -WP13043-2022.DOC

Santosh

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION

WRIT PETITION NO. 13043 OF 2022

Peoples Empowerment Group through its President Mr. Pramod Kumar Shrivastava ...Petitioner Versus 1. Sachin Sonawane SANTOSH SUBHASH 2. Saroja Rajendra Asthana KULKARNI 3. Harishankar Srivastava (deceased) Digitally signed by SANTOSH SUBHASH KULKARNI 4. Shantidevi Srivastava (deceased) Date: 2025.03.11 14:30:53 +0530 5. Suvira Asthana (deceased) 6. Subramaniam Jayraman 7. Dr. Chitra Asthana (deceased) ...Respondents

Mr. S. S. Panchpor, a/w Pratibha Gavhane and Akshay Rabade, for the Petitioner. Mr. Akil Kupade, for Respondent No.1.

CORAM: N. J. JAMADAR, J. DATED: 10th MARCH, 2025

JUDGMENT:

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1. Rule. Rule made returnable forthwith and with the

consent of the learned Counsel for the parties, heard finally.

2. The challenge in this petition is to an order dated 27 th

April, 2022 passed by the learned District Judge presiding over

the Commercial Court at Pune, whereby an application

(Exhibit-41) preferred by the petitioner - defendant No.1 and co-

defendant Nos.2, 3 and 7, to provide a fresh timeline for the

actions in the commercial suit, being Special Civil Suit No.228

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of 2016, and take the written statement filed on behalf of

defendant Nos.1 and 2 on record, purportedly under the

provisions of sub-section (4) of Section 15 of the Commercial

Courts Act, 2015, came to be rejected.

3. The petition arises in the backdrop of the following facts:

3.1 The respondent instituted a suit for recovery of an amount

of Rs.1,32,62,401.88 alongwith interest thereon at the rate of

18% p.a. asserting that defendant No.1 Trust and defendant

Nos.2 to 8, the trustees of defendant No.1, had placed a work

order for extension and maintenance of the Engineering College

building of defendant No.1. The plaintiff had executed the work

in accordance with the terms of the contract. Bills were raised.

However, the defendants committed default in payment of bills.

3.2 Initially the suit was filed before the Court of Civil Judge,

Senior Division, Pune, and was numbered as Special Civil Suit

No.1094 of 2016. It seems, after scrutiny, the suit came to be

transferred to the Commercial Court. Pursuant to an order

dated 20th October, 2016 the said suit i.e. Special Civil Suit

No.228 of 2016 (new) came to be assigned to the Commercial

Court presided over by District Judge-1, Pune.

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3.3 The Commercial Court issued the summons. The

summons was served on the defendants. Defendant No.1

appeared before the Commercial Court on 27th January, 2017.

Defendant Nos.2, 3 and 7 entered appearance on 20 th March,

2017.

3.4 The written statement was not filed within the period

stipulated by the proviso to Order VIII Rule 1 of the Code of Civil

Procedure, 1908 ("the Code"), as amended by Act No.4 of 2016 in

its application to commercial disputes. On 6 th July, 2017,

defendant Nos.1 and 2 filed an application for condonation of

delay in filing the written statement (Exhibit-23) alongwith

written statement.

3.5 In the meanwhile, it seems the Commercial Court remitted

the suit back to the Court of Civil Judge, Senior Division, to

determine as to whether the dispute in the said suit was a

commercial dispute under clause (c) of sub-section (1) of Section

2 of the Commercial Courts Act. The learned Civil Judge heard

the parties and by an order dated 17 th April, 2019 ruled that the

dispute was of commercial nature and, thus, the suit was

required to be tried and decided by the Commercial Court.

3.6 Upon the transfer of the suit back to the Commercial

Court, defendant Nos.1, 3 and 7 filed application (Exhibit-41) for 3/17 ::: Uploaded on - 11/03/2025 ::: Downloaded on - 11/03/2025 21:56:40 :::

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fixing a fresh timeline purportedly under Section 15(4) of the

Commercial Courts Act, and also prayed for taking the written

statement filed on behalf of defendant Nos.1 and 2 on 6 th July,

2017, on the record of the Court.

3.7 The plaintiff resisted the application asserting, inter alia,

that the provisions of Section 15(4) had no application and the

maximum time prescribed under proviso to Order VIII Rule 1 of

the Code, in its application to the Commercial Courts, had

elapsed and the defendants cannot be permitted to file the

written statement thereafter.

3.8 By the impugned order, the learned District Judge was

persuaded to reject the application observing that, the

defendants themselves had filed an application for condonation

of delay in filing the written statement specifically

acknowledging that, they were required to file written statement

within 120 days and after realizing that such an application was

not maintainable, the defendants turned around and filed an

application purportedly under Section 15(4), of the Commercial

Courts Act, to fix a fresh timeline. The defendants attempted to

take an undue advantage of the order passed by the learned

Civil Judge on 17th April, 2019 though the time to file the written

statement was over long back.

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3.9 By an order of even date, the learned District Judge also

rejected the application to take the written statement on record

(Exhibit-23) observing that, the Court had no jurisdiction to

take the written statement on record after 120 days.

4. Being aggrieved by the order rejecting the prayer to take

the written statement on record (Exhibit-41), the defendants

have invoked the writ jurisdiction.

5. Mr. Panchpor, the learned Counsel for the petitioner,

submitted that the learned District was in error in holding that

the period stipulated for filing the written statement cannot be

extended on an incorrect premise that the proviso to Rule 1 of

Order VIII, as amended by Act No.4 of 2016, was attracted to the

facts of the case. It was urged, with a degree of vehemence, that

in the case at hand till the learned Civil Judge decided the issue

that the dispute was a commercial dispute within the meaning

of Section 2(c) of the Commercial Courts Act, 2015, the

proceedings cannot be said to have been instituted and pending

before the Commercial Court. Since much before such

determination by the learned Civil Judge, defendant Nos.1 and 2

had already filed the written statement on 6 th July, 2017, the

amended proviso to Order VIII Rule 1 had no application at all.

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6. Mr. Panchpor would further urge that merely because

defendant Nos.1 and 2 had stated in their application (Exhibit-

23) to condone the delay in filing the written statement that the

written statement was required to be filed within 120 days, it

could not have been held that the amended proviso to Order VIII

Rule 1 was attracted. The said application (Exhibit-23) was

preferred by defendant Nos.1 and 2 under an incorrect

impression of the nature of the proceedings then pending before

the Commercial Court. Therefore, the defendants cannot be

bound down by the averments in the said application.

7. Mr. Panchpor further submitted, that the written

statement of defendant Nos.1 and 2 had already been filed. It

would advance the cause of substantive justice if defendant

Nos.1 and 2 are permitted to file the written statement and

contest the suit, on merits. In a situation of this nature, where

the very nature of the suit as a commercial suit was in the

corridor of uncertainty, the suit can be said to have been

transferred to the Commercial Court under Section 15 of the

Commercial Courts Act, 2015 only after the order dated 7 th

April, 2019 passed by the learned Civil Judge. Therefore, the

Commercial Court was competent to determine a fresh timeline.

In that event, the proviso to sub-rule (1) of Rule1 of Order V

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does not operate. Thus, having regard to the substance of the

matter, the defendants deserve an opportunity of defending the

suit, urged Mr. Panchpor.

8. Mr. Kupade, the learned Counsel for respondent No.1,

countered the submissions on behalf of the petitioner. It was

urged that the defendants having themselves sought

condonation of delay in filing the written statement, by filing

application (Exhibit-23), cannot be now permitted to take an

advantage of the order passed by the Civil Judge determining

the nature of the Commercial Dispute. According to Mr. Kupade,

the provisions contained in Section 15(4) of the Commercial

Courts Act have no application at all. The said provision applies

to the suits which were pending on the date of the enforcement

of the Commercial Courts Act, 2015 and were required to be

transferred to the Commercial Courts. In essence, sub-section

(4) of Section 15 applied only to the suits pending on the date of

the enforcement of the Commercial Courts Act.

9. On facts, Mr. Kupade would submit, the contention of the

defendants that the summons were served on 23 rd January,

2017 is not correct. In fact, the defendants were enjoined to file

written statement within 120 days, in the maximum, of the

service of the writ of summons. The defendants have

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conveniently computed the period of delay from the date of

appearance before the Court which is not germane for deciding

the period stipulated for filing the written statement. As the

period of 120 days was over much before the Commercial Court

remitted the matter back to the Civil Court for determining the

question as to whether the dispute was cognizable by the

Commercial Court, the defendants cannot be permitted to draw

any mileage from the subsequent orders passed by the Civil

Court on 17th April, 2019.

10. The facts are not much in dispute. Initially, the suit was

instituted before the Civil Court, Pune, on 30 th August, 2016.

The suit came to be transferred to the Commercial Court.

Summons to the defendants were issued by the Commercial

Courts. Defendant No.1 appeared on 27 th January, 2017 and

defendant Nos.2, 3 and 7 appeared on 20 th March, 2017.

Indisputably, the written statement was not filed within 30 days

or the extended period of 120 days. On 6 th July, 2017,

defendant Nos.1 and 2 filed an application to condone the delay

in filing written statement (Exhibit-23). While the said

application was awaiting adjudication, the matter was remitted

back to the learned Civil Judge by an order dated 17 th April,

2019, the learned Civil Judge determined that the suit was

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cognizable by the Commercial Court. Thereafter on 1 st

February, 2020, defendant Nos.1, 3 and 7 have filed the instant

application.

11. It is imperative to note, at this stage, there is no

controversy over the fact that the dispute in question falls in the

realm of a commercial dispute. The order passed by the learned

Civil Judge, Senior Division on 17 th April, 2019 making such

declaration has not been challenged and has attained finality.

In fact, by resorting to the provisions of Section 15(4) of the

Commercial Courts Act, the defendants have prayed for framing

a fresh timeline and taking the written statement on record.

12. Having regard to the nature of the controversy, this Court

considered it appropriate to direct the petitioner to place the

copies of the summons and reports of service of the summons

on the defendants. From the perusal of the copies of the

summons and the report of Bailiffs overleaf, it appears that

summons was issued by the District Court on 3 rd December,

2016 and it was served on defendant Nos.2 and 3 on 9th

December, 2016 itself. However, the defendants claimed to have

been served with the summons on 23 rd January, 2017. The date

of service of summons on defendant Nos.1 and 2 assumes

significance.

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13. Under the provisions of Order VIII Rule 1 and the Order V

Rule 1, the time to file the written statement commences from

the date of service of summons on the defendants. The proviso

to Rule 1 Order VIII in its application to the Commercial Court

provides that the Court may allow the defendant who fails to file

the written statement within the said period of 30 days but not

later than 120 days from the date of service of summons and on

expiry of the said period of 120 days, 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. In view of the

aforesaid provisions, the period of 120 days, at least in case of

defendant No.1 - petitioner herein, and defendant No.2, was

required to be computed from the date of service of summons.

Therefore, the computation of the period of delay from the date

of appearance as was professed to be done in the application

(Exhibit-23) does not merit acceptance.

14. Evidently, the said period of 120 days had expired much

before 6th July, 2017 on which day the defendant Nos.1 and 2

filed application seeking condonation of delay in filing the

written statement (Exhibit-23). Incontrovertibly, the said

application could not have been allowed as no Court has the

power to condone the delay in filing the written statement

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beyond 120 days, in a commercial suit. The matter would have

thus attained a quietus but for the subsequent development, in

the nature of remittance of the suit back to the Civil Court for

deciding the question as to whether the dispute was of

commercial nature and the findings thereon by the learned Civil

Judge on 17th April, 2019.

15. The moot question that arises for consideration is whether

the provisions contained in Section 15(4) of the Commercial

Courts Act are attracted. If the answer is in the affirmative,

then the second proviso to sub-rule (1) of Rule 1 of Order V may

not be attracted. In other words, but for the consequences that

emanate from the subsequent development, the defendants had

forfeited their right to file the written statement.

16. As noted above, initially the learned Civil Judge, Senior

Division made reference to the District Judge and thereupon the

suit came to be transferred to the Commercial Court. Later on,

after the parties entered their appearance and the time to file

written statement had elapsed, the Commercial Court again

remitted back the suit to the Civil Court.

17. This Court was anxious to consider as to whether these

actions of the Civil Court and the Commercial Court caused any

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is instituted before a Civil Court, the proper course is to return

the plaint for the presentation to the Commercial Court. In the

case of Ambalal Sarabhai Enterprises vs. KS Infraspace LLP

Limited and another1, the Supreme Court has enunciated that

the object of the Commercial Courts Act, 2015 would be

defeated, if every other suit is entertained by the Commercial

Court merely because it is filed before the Commercial Court.

The suits which are actually not relating to the commercial

dispute but being filed merely because of the high value and

with the intention of seeking early disposal would only clog the

system and block the way for the genuine commercial disputes,

which may have to be entertained by the Commercial Courts as

intended by the lawmakers. In commercial disputes as defined

a special procedure is provided for a class of litigation and a

strict procedure will have to be followed to entertain only that

class of litigation in that jurisdiction. If the same is strictly

interpreted it is not as if those excluded will be non-suited

without any remedy. The excluded clause of litigation will in

any event be entertained in the ordinary civil courts wherein the

remedy has always existed. In that view it is also necessary to

carefully examine and entertain only disputes which

actually answer the definition of "commercial disputes" as

1 (2020) 15 SCC 585.

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provided under the Act. If the courts come to the conclusion

that an ordinary suit is filed in the Commercial Court, the

plaint be returned under Order VII Rule 10 for being presented

to the proper Court.

18. In the case at hand, it appears that the said course was

not adopted by the Civil Court in the first instance, and by the

learned District Judge, when the suit was again remitted back

to the Civil Judge for a decision as against the nature of the

dispute. It would have been in the fitness of things for the

District Judge to himself examine whether the dispute fell

within the ambit of the commercial dispute and, thereafter, pass

an appropriate order. These infractions, however, in the facts of

the case, do not seem to have caused any prejudice to the

defendants.

19. This Court finds it difficult to accede to the submission of

Mr. Panchpor that on account of the order passed by the

learned Civil Judge on 17th April, 2019, there was a transfer of

the suit to the Commercial Court and, therefore, the provision of

Section 15(4) are attracted. On a plain reading of Section 15(2),

it becomes abundantly clear that the said provision applies to

the suits which were pending on the date of the enforcement of

the Commercial Courts Act, 2015. Consequently, the issue of

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prescription of new timeline or further directions under sub-

section (4) of Section 15 would arise only in the suits which were

transferred in terms of sub-section (2) of Section 15 of the

Commercial Courts Act, 2015.

20. It is equally well settled that if a plaint is returned under

Order VII Rule 10 for presentation to the proper court, the

proceedings before the proper court, in the said suit, shall

commence de nova. The proceedings that had taken place

before the Court which had no jurisdiction are of no relevance.

The proceedings before the proper court do not continue from

the stage at which the plaint was returned to the plaintiff for

presentation to the proper court. Therefore, the endeavour of

the defendants to bank upon the provisions contained in

Section 15(4) of the Commercial Courts Act, 2015 does not merit

countenance.

21. Reliance placed by Mr. Kupade on the judgment of the

Delhi High Court in the case of Virendra Kumar vs. Rekha

Bhayana2 appears to be well-founded. In the said case, it was

enunciated that the provisions contained in Section 15(2) of the

Commercial Courts Act cannot be treated as provisions which

can apply in futuro for all times to come, so as to permit

2 CM(M)/842/2022 dtd.25.8.2022.

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litigants to file commercial suit before the Civil Court and have

the suit transferred to the Commercial Court.

22. A useful reference can also be made to a Division Bench

judgment of this Court in the case of Reliance General

Insurance Co. Ltd. vs. Colonial Life Insurance Company

(Trinidad) Ltd and another3 wherein while determining the

question as to "whether the mandatory timeline of 120 days in

filing a written statement in a commercial suit is applicable to

suits which were filed prior to the enactment of the Commercial

Courts Act, 2015 and which came to be transferred as

commercial suits to be heard by the Commercial Division of the

High Court in accordance with the provisions of Section 15 of

the Commercial Courts Act", the Division Bench construed the

scope and import of the provisions contained in Section 15 of

the Act and emphasised that it applies to pending suits. The

following observations in paragraph 13 are material and hence

extracted below:

"13. ..... Chapter V of the Commercial Courts Act, dealing with the subject, is entitled "Transfer of pending suits". Sub- section (1) of Section 15 provides for compulsory transfer of all suits and applications including applications under Arbitration and Conciliation Act, 1996, relating to commercial disputes of specified pending in a High Court where a Commercial Division has been constituted, to such commercial division. The condition for application of this provision is "pendency" of a suit or application. The provisions which follow [Sub-sections (2) to

3 2021 SCC OnLine Bom 14147.

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(5)] deal with such pending suits transferred to the commercial division. There is no scope for distinguishing between these suits on the basis of service or want of service of writ o summons. Sub-sections (2) to (5) of Section 15 apply to all commercial suits irrespective of the date of service of writ of summons."

(emphasis in origin)

23. I also find substance in the submissions of Mr. Kupade

that the defendants themselves proceeded on the premise that

the suit, while it was pending before the Commercial Court, was

a commercial suit. Thus, in the application seeking

condonation of delay (Exhibit-23) the defendants had conceded

that the written statement was required to be filed within 120

days. That being the understanding of the parties to the suit, no

prejudice can be said to have been caused.

24. It is also imperative to note that, as noted above, the

summons was served on defendant Nos.1 and 2 on 9 th

December, 2016 itself and consequently the maximum period of

120 days expired much earlier. Secondly, what further

exacerbates the situation is the delay post determination of the

nature of the suit by the learned Civil Judge. The learned Civil

Judge passed the order on 17th April, 2019. The instant

application (Exhibit-41) was filed on 1 st February, 2020. This

gives heft to the submission on behalf of the respondent No.1,

that the said application (Exhibit-41) was preferred to obtain a

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litigative advantage of the order passed by the learned Civil

Judge on 17th April, 2019. If considered as a whole, the

defendants were conscious of the fact that the written statement

was to be filed within 120 days, there was default in filing and

also the impermissibility of the extension of period beyond 120

days.

25. In the aforesaid view of the matter, this Court does not

find any infirmity in the impugned order. The petition,

therefore, deserves to be dismissed.

26. Hence, the following order:

:ORDER:

(i) The petition stands dismissed.

(ii) Rule discharged.

No costs.

[N. J. JAMADAR, J.]

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