The Order IV: Institution of Suits of the Code of Civil Procedure, 1908 (hereinafter CPC) specifies that a suit shall be instituted by presentation of Plaint.
The Order VI Rule 1 of the CPC1 stipulates that pleading shall mean Plaint or Written Statement.
The significance of a Written Statement filed by the Defendant is very well understood. A Suit becomes meaningful when it is contested on the basis of a well drafted Written Statement.
The Commercial Court Act has added by way of amendment Rule 3A in Order VI, which is reproduced below:
"Order VI:
3A. Form of pleading in Commercial Courts – In a commercial dispute, where forms of pleadings have been prescribed under the High Court Rules or Practice Directions made for the purposes of such commercial disputes, pleadings shall be in such forms."
The Order VIII of CPC deals with Written Statement, Set Off and Counter Claim.
Order VIII Rule 12 deals with written statement to be filed by Defendant in response to the claims made in the plaint. This rule limits the time of filing of written statement to 30 days extendable at the discretion of the Court upto 90 days from the date of service of summons.
The Commercial Court Act has amended Order VIII Rule 1 by addition of a proviso according to which written statement can be filed after 30 days of service of summons only on the condition of payment of cost and at the discretion of the Court to a maximum of 120 days from the date of service of summons. The Defendant's right to file written statement shall stand forfeited after the expiry of said period of 120 days and the Court shall not allow the written statement to be taken on record.
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The Order VIII Rule 1A3 pertaining to production of documents by Defendant has been made inapplicable to written statements filed in Commercial suit. The Production of documents is now governed under relevant Rules provided in the Order XI applicable to Commercial suits. While Rules1-6 govern production of documents by Plaintiff, Rules 7-11 govern production of documents by Defendant, in commercial suits. Rule 12 is generally applicable to both Plaintiff and Defendant. |
Format of written statement prescribed by Order VIII Rule 3A4
The CPC has been amended by addition of Rule 3A to Order VIII which reads as follows:
"Order VIII:
3A. Denial by the defendant in suits before the Commercial Division of the High Court or the Commercial Court – (1) Denial shall be in the manner provided in sub-rules (2), (3), (4) and (5) of this Rule.
(2) The defendant in his written statement shall state which of the allegations in the particulars of plaint he denies, which allegations he is unable to admit or deny, but which he requires the plaintiff to prove, and which allegations he admits.
(3) Where the defendant denies an allegation of fact in a plaint, he must state his reasons for doing so and if he intends to put forward a different version of events from that given by the plaintiff, he must state his own version.
(4) If the defendant disputes the jurisdiction of the Court he must state the reasons for doing so, and if he is able, give his own statement as to which Court ought to have jurisdiction.
(5) If the defendant disputes the plaintiffs valuation of the suit, he must state his reasons for doing so, and if he is able, give his own statement of the value of the suit."
Further, the Commercial Court Act has amended CPC by addition of a proviso applicable to commercial suits which reads as follows:
Rule 5 : Specific Denial ***********
"Provided further that every allegation of fact in the plaint, if not denied in the manner provided under rule 3A of this Order, shall be taken to be admitted except as against a person under disability."
It may be seen from the foregoing paragraphs that while certain provisions of CPC have been made inapplicable, certain new provisions have been added to the CPC at appropriate places in respect of written statement to be filed in response to averments made in the plaint.
Overall, the provisions reproduced herein above are necessarily changing the complete manner in which written statements have to be filed in commercial suits as compared with written statements traditionally filed in civil suits till before.
So far the practice has been to file written statements by alleging preliminary objections and submissions and para-wise reply on merits to the plaint. While this practice remains valid for other category of civil suit but the same can no longer be practiced under the Commercial Suits.
In commercial suits, the denial has to be specific in terms of facts denied, facts admitted, facts unable to be admitted or denied, and facts required by plaintiff to prove, separately, and with reasons. The amendment also requires the defendant to provide his version of events. Denial of jurisdiction and valuation of suit is also to be stated along with reasons by the defendant.
Conclusion
The amendments to the CPC aim to streamline the defence to a commercial suit by prescribing the format of pleading. By necessitating adherence to prescribed written statement format, the CPC enjoins the Defendant to be cautious in defending the suit. Any lapse made at the time of filing written statements shall be taken to be admitted under Rule 5 proviso.
The combined effect of the provisions pertaining to written statements to be filed in commercial suits points to the fact that commercials suits are recognized as a special category of civil suits be disposed efficiently and expeditiously and there should be a frame work of stringent and clearly laid down rules binding the parties to suits to be diligent. The restraints are also meant to curtail frivolous defences and cut down the time of litigation spent in Court.
Footnotes
1. Order VI : Pleadings Generally; Rule 1 - Pleading
2. Order VIII Rule 1 written statement
3. Order XI Rule 7 Certain provisions of the Code of Civil Procedure 1908 not to apply
4. Vide amendment to CPC under Section 16 of Commercial Court Act with WREF 23.10.2015
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
