Legend Travels Pvt. Ltd. vs Galileo India Pvt. Ltd.

Valmiki J Mehta, J.—The Respondent has been served but no one has appeared on its behalf in spite of the mater having been passed over twice. I have, therefore, heard learned Counsel for the Appellant and am proceeding to dispose of the appeal. The challenge by means of the present regular first appeal u/s 96 of the Code of Civil Procedure, 1908 is to the orders dated 17.3.2010, 18.5.2010 and 19.11.2010 whereby the right of the Appellant/Defendant to file the written statement was closed and review against the said orders was dismissed and a money decree passed in favour of the Respondent/Plaintiff, that too without calling upon the Respondent/Plaintiff to lead evidence to prove its case.

The facts of the case are that the Respondent/Plaintiff filed a suit for recovery against the Appellant/Defendant on 3.12.2009. The Appellant/Defendant was served in the case on 8.1.2010, on which date, a period of four weeks was given to file the written statement. On the very next date of hearing, i.e. 17.3.2010, (one of the impugned orders) the trial court closed the right of the Appellant/Defendant to file the written statement as the period of 90 days had expired from the date of service. The Appellant/Defendant immediately moved an application on the very next date seeking permission to file the written statement, however, the said application was dismissed by order dated 18.5.2010. By this very order, the suit was also decreed forthwith without calling upon the Respondent/Plaintiff to file evidence and prove its case. I may note that the suit was filed for recovery of money arising from the contractual relationship of appointment of the Appellant/Defendant as an agent of the Plaintiff company in terms of an agreement dated 9.12.2005. A reference to the plaint shows that various disputed facts are stated in the plaint, and which required proof before the suit could have been decreed. The breach as alleged by the Respondent/Plaintiff of the Appellant/Defendant was with respect to the Appellant/Defendant failing to meet the targets as envisaged for marketing and promotion of the Respondent/Plaintiff as envisaged under their agreement. As already stated, the review petition of the Appellant/Defendant was also dismissed by the trial court vide order dated 19.11.2010.

A reference to the aforesaid facts shows that the present was not such a case of a gross and abnormal delay on the part of the Appellant/Defendant in filing the written statement. The Appellant/Defendant was served for 8.1.2010 and on the next date i.e., 17.3.2010, the right to file the written statement was closed i.e. on the very first day fixed for filing of the written statement. The provision of Order 8 Rule 1 of the Code of Civil Procedure, 1908 as amended by the amending Acts of 1999 and 2002 has now been sufficiently expounded by the Supreme Court by holding that the said provision of Order 8 Rule 1 is directory and not mandatory. The CPC is a procedural code for the conduct of the suit and the same has been held to be a handmaid of justice. One of the first judgments on this aspect holding the provision of Order 8 Rule 1 to be directory was the case of Kailash Vs. Nanhku and Others, . The ratio of the decision in the case of Kailash (supra) has also thereafter been repeatedly followed by the Supreme Court in various other judgments including Smt. Rani Kusum Vs. Smt. Kanchan Devi and Others, , Mr. Shaikh Salim Haji Abdul Khayumsab Vs. Mr. Kumar and Others, and R.N. Jadi and Brothers and Others Vs. Subhashchandra, . Of course, the provision of Order 8 Rule 1 is not to be so liberally interpreted so as to allow gross delays and negligence on the part of the Defendant in filing the written statement. The facts of each case therefore have to be seen as to whether there is gross delay or negligence so as to disentitle the Defendant for extension of time for filing of the written statement. I have already noted that in the present case on the very first adjourned day fixed for filing of the written statement, the right of the Appellant/Defendant to file the written statement was closed. This approach of the trial court if accepted, would indeed be very harsh upon the Appellant and who would caused grave prejudice/injustice. I am further surprised that the trial court dismissed the application seeking review of the order dated 17.3.2010 and which was filed as early as the very next date i.e., 18.3.2010. I am also further constrained to note that even assuming the right of the Appellant/Defendant to file the written statement was closed, the present case was not such a case that the same should have been decreed straightway without any evidence at all being led on behalf of the Appellant. In fact, by the order dated 17.3.2010, the case was fixed for ex parte evidence on 5.4.2010 but inexplicably thereafter, the suit was straightway decreed on 18.5.2010 when the application of the Appellant/Defendant for extension of time for filing the written statement was also dismissed. This order does not even discuss the basic facts of the case of the Plaintiff so as to entitle a grant of a decree. The only discussion, if at all the same can be said to be a discussion, for grant of the decree is as under:

Law provides for filing of written statement within a period of thirty days from the service of summons. The said period can e extended for reasons to be recorded in writing but in no case after the expiry of 90 days from the date of service of summons. Extension of the period of 90 das can be allowed by way of exception for reasons to be assigned by the Defendant. Reasons have to be exceptional and must satisfy the Court. Defendant has to satisfy that the delay in filing the written statement took place due to the reasons beyond his control. I place reliance on the case of Anil Kushabrao Phutane Vs. Madhukar Kushabrao Phutane and Others, and the case of Atul Goel v. Raghubir decided by the Hon''ble High Court of Delhi on 14.3.2008 in IA No. 8015/2006 in CS (OS) No. 138/2006. Application of the Defendant for extension f time for filing of written statement beyond 90 days from the date of service of summons is hence devoid of merits. The same is hence dismissed.

Plaintiff has claimed interest @ 18% per annum from the date of agreement i.e. 9.12.2005. Admittedly, no rate of interest was agreed upon between the parties. The said rate is on the higher side. Keeping in view the bank rates of interest prevailing in the year 2005 when the agreement was entered into, I am of the view that the Plaintiff is entitled to the recovery of an amount of Rs. 15 lakhs along with interest @ 8% per annum w.e.f.9.12.2005 till the date of its realization. Decree sheet be drawn accordingly. File be sent to records.

In view of the above, I set aside the impugned orders dated 17.3.2010, 18.5.2010 and 19.11.2010. The decree passed in favour of the Respondent/Plaintiff and against the Appellant/Defendant vide order dated 18.5.2010 is also set aside. The Appellant/Defendant is allowed to file the written statement, and the written statement already filed by the Appellant/Defendant along with the application for review is taken on record. Parties to appear before the trial court on 6th April, 2011 for further proceedings in the case. Parties are left to bear their own costs. Trial court record be sent back.