The Indian judiciary’s clogged pipelines of justice are an issue which has been ongoing for many years. One of many largest contributors to the identical has been the delay of submitting written statements in business civil fits. To resolve this dilemma, the Apex Court docket within the landmark judgment of SCG Contracts laid a tough time restrict of 120 days for submitting of written assertion underneath Order VIII Rule I of the Civil Process Code, 1908. The creator argues that in furtherance of the efforts for quicker supply of justice, it’s important that the method laid in SCG Contracts with respect to written statements, also needs to be relevant on submitting of counter-claims, and concludes by calling for stricter enforcement of time constraints within the Indian judiciary.
“All the foundations of process are the handmaids of justice. The language employed by the draftsman of procedural regulation could also be liberal or stringent, however the reality stays that the article of prescribing process is to advance the reason for justice.”
The above extract belongs to the opinion penned by erstwhile CJI Lahoti within the landmark Supreme Court docket judgment of Kailash vs. Nanhku. The judgment clarified the place of regulation on the outer restrict relating to the submitting of written statements, by holding the restrict of 90 days prescribed underneath the proviso to Order VIII Rule 1 as being merely listing, and never necessary. It was famous that the Civil Process Code’s provisions should not be construed in a way which would depart Courts helpless underneath extraordinary conditions to attain justice.
This place of regulation was additional solidified by the Apex Court docket within the case of Salem Bar Affiliation v. Union of India, whereby Guidelines 1, 9 and 10 of Order VIII have been harmoniously construed, whereas re-affirming Kailash’s ratio of holding the time restrict of 90 days underneath Order VIII Rule 1 as solely being listing. Whereas there exists little question that the Supreme Court docket’s interpretation permits the achievement of justice in Courts, it additionally resulted in growing the backlog of the already over-burdened Indian Judiciary. The tragic story of pending instances in India is an previous one, with an enormous physique of analysis serving as proof for a similar. As of Might 2022, there have been roughly 4.7 crore instances pending throughout varied Courts of various ranges. The Supreme Court docket itself had 71,411 instances pending, of which a majority have been civil instances, with a energy of 56,365 instances.
Thus, it comes as no shock that one of many main driving forces behind the enactment of the Business Courts Act, 2015 was expeditious disposal of instances. This goal was additional clarified by the Supreme Court docket’s seminal judgment in M/s SCG Contracts India vs. Okay.S. Chamankar Infrastructure, whereby it was declared that the restrict of 120 days with respect to business fits underneath Order VIII Rule 1 is necessary. This resolution is commonly hailed as proof indicative of a pivotal shift within the Indian judiciary’s outlook in the direction of assembly statutory deadlines. In continuation of the identical, the target of this paper is to find out whether or not the optimistic shift in outlook was a mere flash within the pan, or indictive of one thing extra. It achieves this, by analysing whether or not the necessary nature of cut-off dates underneath Order VIII Rule 1’s written statements can be relevant to Counter-Claims filed in business fits, underneath Order VIII Rule 6.
This piece begins by laying down the legislative framework of Order VIII, and understanding the theoretical background of written statements and counter-claims. The following half traces the genesis and enactment of the Business Courts Act, 2015 and additional evaluates its impression on written statements and counter-claims. Half IV delves into the landmark judgment of SCG Contracts, whereas exploring its factual matrix and ratio. On the premise of the authorized groundwork laid until this level, Level V ponders upon whether or not the ratio of SCG Contracts can be relevant to counter-claims, by exploring and analysing up to date judicial choices. Half VI concludes, whereas calling for stricter enforcement of time constraints for unclogging the pipelines of justice within the Indian Judiciary.
The Legislative Framework of Order VIII: Written Statements vis-à-vis Counter-Claims
Order VIII of the Civil Process Code, 1908 comprises the related Guidelines regarding Written Statements, Set-off and Counter-Claims. Whereas a definition of the time period ‘written assertion’ is just not current within the CPC, courts have outlined the identical to suggest a reply to the plaintiff’s plaint. Counter-claims alternatively, are claims made by the defendant in a swimsuit towards the plaintiff. It primarily refers to a cross-action, and was made a particular provision within the CPC by the Modification Act of 1976. Whereas the Code initially prescribed a time restrict of 30 days from the day of service of summons for submitting written statements, the identical was elevated to 90 days by the Modification Act, 2002. As defined earlier, this restrict was interpretated to be merely listing and permissive, quite than crucial by the Supreme Court docket in Kailash and Salem Bar. Whereas in accordance with Order VIII Rule 6A (3), the plaintiff has the freedom to file a written assertion in response to a counter-claim as per the restrict mounted by Courts. Nevertheless, the identical have to be learn with Order VIII Guidelines 6A (4) and 6G, in keeping with which a counter-claim have to be handled as a plaint, and that the foundations relevant on a written assertion by a defendant are additionally relevant on the written assertion filed in response to the counter-claim.
The Legislative Journey of Business Courts Act, 2015: Time as a Cornerstone
The legislative historical past of the Business Courts Act, 2015 (herein after ‘the Act’) may be traced so far as again to December 2003, the place the concept was proposed within the 188th report of the 17th Regulation Fee of India, because the proposal for structure of hi-tech quick observe Business Divisions in Excessive Courts. Taken up suo moto, the Regulation Fee proposed the identical with the target of expedient & environment friendly decision of business disputes, particularly conserving in thoughts India’s new financial coverage from 1991. One other main propellant for the Act’s enactment was to reply to worldwide judgments, akin to Shin-estu vs. ICICI Financial institution and European Asian Financial institution vs. Punjab & Sind Financial institution, which had explicitly negatively famous the Indian judiciary’s slow-response time, alongside the humungous backlog. After being the topic of extra dialogue, starting from the 2009 Convention of Chief Justices of the Excessive Courts to the Business Division of Excessive Courts Invoice, 2009, in January 2015, the 253rd Report of the Regulation Fee of India revealed the Business Division and Business Appellate Division of Excessive Courts Invoice, 2015. The brand new Invoice positioned a a lot larger emphasis on speedy trials, by together with provisions for stricter timelines for submitting of pleadings, and mandating time sure judgment supply. It’s pertinent to notice at this juncture, that the aforementioned Invoice is solely relevant solely on business disputes which meet the edge of ‘specified worth’, which is elaborated upon inside Part 12 of the identical.
This proposed invoice was ultimately positioned earlier than each the Homes, and handed by December 2015. In Might 2018, the Act was amended with the target of accelerating India’s business attractiveness, and emphasis was but once more laid on enhancing Court docket’s response time in delivering justice. One other instance of the significance levied on time by the Drafters is Order VIII of the CPC. Some of the affected provisions of the CPC by the Business Courts Act was Order VIII, underneath which a most restrict of 120 days for submission of written assertion was prescribed, by advantage of Part 16 and the Schedule of the Act. Therefore, it’s evident from the Act’s legislative journey that the framers had positioned speedy supply of justice as one of many cornerstones of the Act. An extension of that is exactly what the Supreme Court docket handled, and clarified within the landmark case of SCG Contracts.
SCG Contracts: Imposing the Onerous Restrict of 120 Days
Being a watershed second for stricter enforcement of cut-off dates set in statutes, and taking part in a big position in future comparable instances, it’s essential to undertake an evaluation of SCG Contracts.
The Petitioner filed a civil case towards the Respondent earlier than the Delhi HC, whereas claiming a compensation of roughly Rs. 7 crores. The case was listed as a business dispute, and the Respondent was served summons on 14/07/17, and was mandated to answer by 11/11/17, in accordance with Order VIII Rule 1. After a subsequent problem towards the Plaintiff’s swimsuit, which was rejected, the Respondent filed his written assertion on 15/12/17. Nevertheless, earlier than the Respondent’s response, the Plaintiff on 6/08/17 raised an objection towards taking the previous’s written assertion on file, for the reason that identical was in violation of the Business Court docket Acts and its Modification.
The Delhi HC rejected the Plaintiff’s competition, and accepted the Respondent’s written assertion. Aggrieved by the identical, the Plaintiff challenged the identical earlier than the Supreme Court docket. Therefore, the first query earlier than the Apex Court docket was whether or not a Court docket might tackle file a written assertion in a business dispute, regardless of the passage of the time restrict of 120 days.
The Court docket answered the query in unfavourable, and held that the time restrict of 120 days to file written statements is necessary in nature, and never listing, as is the case in regular civil fits. If the celebration fails to file mentioned assertion inside 120 days, then their proper stands forfeited. It was additional held that Courts lacks the facility to tackle file any such written assertion, which has handed 120 days, or lengthen the utmost date. It was additional reiterated that Courts can’t abuse the facility granted to them underneath Part 151 of the CPC for the sake of bypassing or circumventing a compulsory procedural process and its penalties. The judgment affirmed the ratios of different Excessive Court docket judgments in the identical vein, akin to Oku Tech Pvt Ltd v Sangeet Agarwal & Ors, Maja Cosmetics v Oasis Business Pvt Ltd and many others. The implications of MCG Contracts are enormous, given how it’s the first Supreme Court docket judgment on business fits, which enforces the time restrict prescribed by the statute, and makes a transparent deviation from the earlier method adopted underneath non-commercial fits, underneath which the cut-off dates are merely listing.
Persevering with the SCG Contracts Method: Time Restrict for Counter-Claims
There exists little question relating to the optimistic reception of SCG Contracts method of adhering to statutory cut-off dates, as not solely does it end in speedier supply of justice, but additionally permits one to respect the language of the regulation. Therefore, it’s crucial to judge whether or not the necessary following of cut-off dates in business fits is restricted solely to submitting of written statements, or if it additionally extends to different provisions of the Code, akin to counter-claims.
A latest Madras Excessive Court docket judgment answered the identical in unfavourable, whereas holding that the necessary restrict of 120 days for a written assertion, is inapplicable to a counter-claim’s written assertion. The Court docket’s raison d’etre behind the identical was the truth that SCG Contracts merely referred to Order VIII Rule 1, and that since counter-claims are ruled by Rule 6, there isn’t any applicability of the previous. This argument, whereas ex facie sound, doesn’t stand additional detailed evaluation. The Madras HC depends on a 2010 Excessive Court docket judgment as the premise of their judgment, to conclude that counter-claims are ruled underneath Order VIII Rule 6-A.
Whereas the identical in itself could also be legally legitimate, the judgment ignores Rule 6-G of Order VIII, by selectively excluding its applicability on the time restrict on counterclaims. Rule 6-G explicitly states that guidelines governing written statements are additionally relevant on written assertion filed in response to a counter-claim. Therefore, conserving the identical in thoughts, it could be soundly concluded that the 120 day’s necessary time restrict mounted for written statements shall additionally govern written assertion filed as a reply to the counter-claim. Not solely is similar in alignment with the goal of the Business Courts Acts, 2015, it additionally falls according to the target behind counter-claims, which is to save lots of time, and help in avoiding multiplicity of instances and extended trials i.e., to make sure speedy justice. Thus, it’s submitted that the Madras Excessive Court docket has erred in holding counter-claims free from the necessary time restrict of 120 days. Afterall, the precept of vigilantibus et non dormientibus jura subveniunt i.e., regulation solely assists those that are vigilant with their rights, and never these are asleep on them, is a core tenant of regulation. This matter has been escalated to the Apex Court docket, and it’s hoped that the Supreme Court docket corrects the place of regulation.
Conclusion: Name for Pivotal Shift
The humongous backlog of instances has plagued the Indian judiciary since the previous couple of many years. One of many keys for fixing the identical is making certain a fast response time. As proved earlier, the enactment of the Business Courts Acts, 2015 alongside the Supreme Court docket’s judgment in SCG Contracts are indicators of a change in outlook with respect to speedy justice, and signify a future stuffed with hope. Nevertheless, judgments akin to that of the Madras Excessive Court docket, dampen the potential of such a future, by following a very expansionist method. Not solely does the identical delay the method of justice, it finally ends up contributing to the overflowing case backlog.
Holding the identical in thoughts, the creator hopes that there continues to be judgments in the identical vein as SCG Contracts, and prays that the shift in outlook in the direction of speedy justice persists, in flip resulting in higher justice, since justice delayed is justice denied.
The creator is an undergraduate scholar of regulation on the OP Jindal Regulation Faculty
 Takwani CK, Civil Process (Japanese Ebook 2018) 264.