M/S SCG CONTRACTS INDIA PVT. LTD. versus K. S. CHAMANKAR INFRASTRUCTURE PVT. LTD. & ORS.

Citation: [2019] 3 S.C.R. 1050 · Decided: 12-02-2019 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Appeal(s) allowed

Cited by 5 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

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1050                    SUPREME COURT REPORTS            [2019] 3 S.C.R.
M/S SCG CONTRACTS INDIA PVT. LTD.
v.
K. S. CHAMANKAR INFRASTRUCTURE PVT. LTD. & ORS.
(Civil Appeal No. 1638 of 2019)
FEBRUARY 12, 2019
[R. F. NARIMAN AND VINEET SARAN, JJ.]
Code of Civil Procedure, 1908 (As amended in the wake of
the Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts Act, 2015 coming into force on
23-10-2015):
Or. VIII, r. 1, proviso and r. 10, proviso, Or. V, r. 1, sub rule
(1), second proviso – Written statement – Procedure when party
fails to present written statement called for by court – On facts, in a
commercial suit, failure of defendant No.1 to file written statement
within 120 days from the date of service of summons – Meanwhile,
filing of application under Or. VII, r. 11 – Rejected by order dated
05.12.2017 – Thereafter, defendant no. 1 sought time for filing the
written statement – Extension of time till 15.12.2017, subject to
defendant paying cost – Pursuant thereto, written statement filed
on 15.12.2017 – Thereafter, belated application filed averring that
in view of the amendments in CPC, written statement could not be
taken on record since 120 days had elapsed from the date of service
of summons of the suit – High Court allowed the written statement
to be taken on record even though order dated 05.12.2017 had
become final and provisions of law were amended – On appeal,
held: Proviso in Or. VIII r. 10 states that the Court has no further
power to extend the time beyond the period of 120 days – Beyond
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 – All this points to
the fact that the earlier law on the filing of written statement under
Or. VIII, r. 1 has now been set at naught – Clear, definite and
mandatory provisions of Or. V r/w Or. VIII, r. 1 and 10 cannot be
circumvented by recourse to the inherent power u/s. 151 – Thus, the
05.12.2017 order cannot be sustained – Second order dated
24.09.2018 is also set aside – Even assuming that the 05.12.2017
order is final, res judicata cannot stand in the way of an erroneous
[2019] 3 S.C.R. 1050
1050
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1051
interpretation of a statutory prohibition – Thus, the written statement
of defendant no. 1 to be taken off the record – Res judicata.
Allowing the appeal, the Court
HELD: 1.1 A perusal of the amendments made in the wake
of the Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts Act, 2015 to Code of Civil
Procedure-Or. VIII, r. 1 and 10 proviso, Or. V, r. 1 sub rule (1)
second proviso, would show that ordinarily a written statement
is to be filed within a period of 30 days. However, grace period of
a further 90 days is granted which the Court may employ for
reasons to be recorded in writing and payment of such costs as it
deems fit to allow such written statement to come on record.
Beyond 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. This is further buttressed by the proviso in Order VIII
Rule 10 also adding that the Court has no further power to extend
the time beyond this period of 120 days. Given the consequence
of non-filing of written statement, the amended provisions of the
CPC will have to be held to be mandatory. The consequence of
forfeiting a right to file the written statement; non-extension of
any further time; and the fact that the Court shall not allow the
written statement to be taken on record all points to the fact that
the earlier law on Order VIII Rule 1 on the filing of written
statement under Order VIII Rule 1 has now been set at naught.
The clear, definite and mandatory provisions of Order V read
with Order VIII Rule 1 and 10 cannot be circumvented by
recourse to the inherent power under Section 151 to do the
opposite of what is stated therein. Therefore, the 05.12.2017 order
which applies in the face of the amendments made to the
CPC cannot be sustained. [Para 8, 10, 11, 16, 17][1056-B-C;
1057-B-C-D; 1058-F-G]
1.2 An issue of law which arises between the same parties
in a subsequent suit or proceeding is not res judicata if, by an
erroneous decision given on a statutory prohibition in the former
suit or proceeding, the statutory prohibition is not given effect
to. Th

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