CENTRAL BANK OF INDIA V. JAY KUMAR GOYAL IA NO. GA-COM/3/2025 IN CS-COM/83/2025:

DATE: 06/11/2025

COURT: High Court of Culcutta

BENCH: Justice Aniruddha Roy

FACTS:

The case concerns an application filed by Defendant Nos. 5 to 15 in a pending commercial suit seeking an extension of time to file their written statement beyond the initial 30 days but within the statutory limit of 120 days from the date of service of summons. The defendants requested the Court to condone a delay of 87 days in filing their written statement and permit them to place it on record. According to the case timeline, the writ of summons was served on different defendants between July 10 and August 18, 2025, and the Master Summons seeking extension was taken out on November 4, 2025, within the 120-day period prescribed under Order VIII Rule 1 of the Code of Civil Procedure (CPC) as amended by the Commercial Courts Act, 2015.

The defendants argued that the delay occurred due to the voluminous nature of the plaint and accompanying documents, which spanned eleven volumes. They also contended that some of the impugned share transfer transactions dated back seven years, requiring time to gather relevant records. Additionally, they were occupied contesting two interlocutory applications, one for injunction filed by the plaintiffs and another for revocation of leave under Section 12A of the 2015 Act, which concluded shortly before the Puja vacation. The plaintiffs opposed the application, contending that the defendants had ample time and access to the necessary documents, and that pendency of interlocutory proceedings was no justification for failing to meet the 30-day filing mandate.

ISSUES:

The primary issue before the Court was whether the delay of 87 days in filing the written statement by the defendants, beyond the 30-day statutory period but within 120 days from the date of service of summons, could be condoned and whether the Court should exercise its discretion to allow the filing of the written statement in light of the reasons provided.

JUDGEMENT WITH REASONING:

The Court allowed the defendants’ application, granting them an extension of time to file their written statement as a special case. It directed the defendants to submit the written statement by 6:00 p.m. on the same day and imposed a cost of Rs.50,000 to be deposited with the State Legal Services Authority, West Bengal, within seven days. Failure to pay the cost within the stipulated period would result in the written statement being returned and not taken on record.

The Court observed that under the amended provisions of Order VIII Rule 1 of the CPC, defendants are permitted to file their written statements within 30 days, extendable up to 120 days for recorded reasons and upon payment of costs. The Court emphasized that the legislative intent was not to deprive a defendant of the right to defend merely due to procedural delays if sufficient cause was shown within the statutory outer limit. It noted that the defendants had filed the Master Summons and affirmed their written statement within the 120-day period, thereby complying with the permissible statutory timeframe. The Court held that the expression in the provision authorizing the Court to specify another day for filing the written statement, for reasons to be recorded, vested discretionary power in the Court to balance procedural discipline with substantive justice.

Further, the Court relied on a coordinate bench decision in Exide Industries Ltd. v. Amara Raja Energy and Mobility Ltd. (2025), which held that in adversarial litigation, matters should preferably be decided on merits rather than on procedural technicalities, provided the delay is neither deliberate nor beyond 120 days. The Court reasoned that the voluminous nature of the plaint, the time required to scrutinize extensive documents, and the defendants’ involvement in parallel interlocutory proceedings constituted reasonable grounds for delay. Denying the extension would unfairly prejudice the defendants and defeat the principles of natural justice. The Court thus concluded that procedural lapses should not override substantive justice, particularly when the written statement was ready and filed within the maximum statutory period.

ANALYSIS:

This case underscores the judiciary’s balanced approach in reconciling procedural discipline with the principles of natural justice in commercial litigation. The Court’s decision reflects a pragmatic interpretation of Order VIII Rule 1 of the Code of Civil Procedure, as amended by the Commercial Courts Act, 2015, which sets strict timelines for filing written statements. While the amendment aims to promote efficiency and avoid undue delay in commercial disputes, the Court reaffirmed that procedural rules should serve justice, not defeat it. By recognizing that the defendants had acted within the 120-day statutory window and that their delay was supported by reasonable explanations, including the voluminous record and parallel proceedings, the Court reinforced the importance of allowing parties a fair opportunity to defend their case on merits.

The ruling also highlights a consistent judicial trend of adopting a “substantive justice over procedural rigidity” approach in commercial cases. The reliance on Exide Industries Ltd. v. Amara Raja Energy and Mobility Ltd. demonstrates that courts are inclined to condone delays within the statutory limit if the delay is neither deliberate nor mala fide. Importantly, the imposition of costs serves as a balancing mechanism, ensuring accountability while preserving the defendants’ right to be heard. This judgment therefore exemplifies how judicial discretion, exercised judiciously, can uphold both procedural discipline and the fundamental right to a fair trial, ensuring that litigation progresses efficiently without compromising justice.