-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO. 272 OF 2008 IN NOTICE OF MOTION NO. 1303 OF 2008 IN SUIT NO. 855 OF 2001 Saga Department Stores Limited ) a Company duly incorporated under the ) Companies Act, 1956 and having its ) registered office at B-5, Jangpura, ) Main Mathura Road, New Delhi 110 014 ) and its Mumbai office at 257, S.V. Road ) Bandra (West), Mumbai 400 050 ).. APPELLANTS Versus Falak Home Developers Pvt. Limited ) a Company duly incorporated under the ) Companies Act, 1956 and having its ) registered office at 18, Ramko Apartment ) 18th Road, Khar (West), Mumbai 400 052 ).. RESPONDENTS Mr. Janak Dwarkadas a/w Mr Rahul Narichania i/b M/s B.Amin & Co. for the Appellants. Mr. Zubair Dada i/b S. Mahomedbhai & Co. for the Respondents. CORAM: SWATANTER KUMAR, C.J. AND V.M . KANADE, J. JUDGMENT RESERVED ON : 30TH JUNE 2008 JUDGMENT PRONOUNCED ON : 10TH JULY 2008 -2- JUDGMENT : (PER SWATANTER KUMAR, C.J.) A simple but question of some legal importance falls for consideration in the present Appeal. What is the scope of judicial discretion of a Court trying a Suit on the Original Side of this Court with reference to Rules 89 to 91 and 265 of the High Court, Original Side, Rules, 1980 (hereinafter referred to as “the Rules”) read with Order VIII Rules 1 and 10 of the Code of Civil Procedure, 1908 ? It is a settled canon of civil jurisprudence that wide discretion is vested with the Court and with the aid of its inherent powers Court can pass orders which may be necessary to achieve the ends of justice. The rules of procedural law are not to scuttle the rights of the parties at the threshold of the proceedings unless an indefeasible right is vested in the other side and it will cause great injustice or prejudice to that party. Exercise of such judicial discretion has to be in consonance with the settled principles of law, amongst which, it is also a settled principle of law that power of the appellate court to examine the legality, correctness or otherwise of a discretionary order is a limited one and unless such order was perverse, contrary to the statute or where the discretion had been exercised in patent violation to the settled percepts of law, -3- Appellate Court may not interfere. 2. The argument raised by the Appellants in the present Appeal is that the learned Single Judge has passed the impugned order in exercise of discretionary power contrary to the specific provision of law as no special circumstances had been shown by the Defendant- Applicant, who had taken out Notice of Motion No.1303 of 2008, seeking condonation of delay in filing the Written Statement. We may refer to the facts giving rise to the present Appeal as under. 3. The Appellants in the Appeal filed a Suit for specific performance of an Agreement dated 1st April 1999 in relation to the property consisting of land admeasuring 1672.25 sq. mtrs. situate at 257, S.V. Road, Bandra (West), Mumbai and the construction raised thereupon consisting of basement, ground and five upper floors. In addition to the relief for specific performance, the Appellants also claimed a declaration that termination of the said Agreement by the Respondents in the Appeal was illegal and there was a valid, subsisting and binding Agreement. Obviously the Appellants had stated that they were willing and ready to perform their part of the contract and it was for -4- the fault of the Respondents who were not discharging their responsibilities under the Agreement, his part could not be performed. The Writ of Summons was served on the Defendants in April 2001, who in turn filed Vakalatnama in August 2001. It is noticed in the impugned order that the same was misplaced from the Court record and fresh Vakalatnama was filed. The Written Statement was not filed within time. The Respondents had taken out Chamber Summons Nos. 11 of 2002 for inspection. This inspection related to the documents which had been given by the Plaintiffs in another proceedings between the parties and this Chamber Summons was later on withdrawn on 6th June 2006. Number of cases were pending between the same parties. Thereafter the Appellants filed Notice of Motion No.1223 of 2007 on 30th March 2007 praying that the Court should pass the judgment for want of Written Statement with costs. This Notice of Motion remained pending and the Respondents-Defendants on 3rd April 2008 had taken out Notice of Motion No.1303 of 2008 praying for condonation of delay caused in filing the Written Statement and for taking the same on record. This application of the Respondents was contested by the Appellants vehemently. In the affidavit in support of the Notice of Motion of the Respondents, it was stated that writ of summons was -5- served upon the Respondents on 20th April 2001 and details of nearly 7 proceedings pending between the parties were given. Chamber Summons was taken out for inspection of the original documents in various proceedings. The Appellants had filed a Suit being Suit No.219 of 2000 which was also withdrawn. The Appellants had filed various proceedings in different Suits together with the Notices of Motion which later were withdrawn. It was also stated that due to genuine over-sight by the Advocate, the Written Statement was not filed in the present Suit and the Respondents tendered unconditional and irreversible apology for the said over-sight and prayed that the delay in filing the Written Statement be condoned and the same be taken on record. According to the Appellants, no reason had been stated which could form a specific or sufficient ground for condoning the delay. Once the Written Statement was not filed within ten weeks, the Appellants were entitled to a decree and the Court could not have extended the time for filing the Written Statement in face of the provisions referred by us at the very outset of the judgment. The Court had not granted any further time by a specific order to file Written Statement and the period contemplated under the Rules had since been expired, the Court was divested of its discretion to condone the delay any further. In fact, Notice of Motion -6- No.1223 of 2007 filed by the Appellants should have been allowed which, in fact, has not even been considered by the learned Single Judge in the impugned order. 4. As is evident from the order impugned in the present Appeal, the Court has only dealt with and disposed of Notice of Motion No. 1303 of 2008 and Notice of Motion No. 1223 of 2007 is not subject matter dealt with in the order impugned in the present Appeal. Thus, we are really not concerned with Notice of Motion No.1223 of 2007 which is still pending before the learned Single Judge. 5. In terms of Rule 88 of the Rules, wherever the Written Statement is called for by the writ of summons, the Defendant in an ordinary Suit shall file an appearance in person or a Vakalatnama within twelve weeks from the date of the service of Writ of Summons. Under Rule 89, if the Defendant commits any default in filing his appearance in person or in filing a Vakalatnama and Written Statement as required under Rule 74 of the said Rules, the Judge in Chambers may, when the Suit appears in the Court for directions, direct that the Suit be set down on board for disposal as an undefended Suit on the same day or on -7- such other day as the Court deems fit. It is obligatory on the Plaintiff in the Suit to take out an application for want of Written Statement by way of Notice of Motion praying for judgment. No such Notice of Motion shall be issued before the date of which the writ of summons is returnable and once affidavit of service of Notice of Motion is filed, the Suit shall be set down on daily board for the purpose of such application. Even where a Suit has not been set down as undefended against the Defendant, the Defendant shall not be allowed to appear and defend it at the trial except with the leave of the Court or the Judge in Chambers. Leave could be granted to file Written Statement, application for giving discovery on payment of costs of adjournment as a condition precedent to defend or to such terms as the Court may deem fit and proper. Besides this requirement of Rule 91, Rule 265 vests wide powers in the Court to enlarge the prescribed time. The said Rule reads as under : “265. Power of Court or Judge to enlarge or abridge time. - The Court or the Judge in Chambers shall have power to enlarge or abridge the time appointed by these rules or fixed by any order for doing any act or taking any proceedings, upon such terms (if any) as the justice of the case may require, and any such enlargement may be ordered although the application for the same is not made until after the expiration of -8- the time appointed or allowed.” The language of Rule 265 indicates the wide discretion that the framers of the Rule intended to vest in the Court. Wherever the time is prescribed under these Rules or time or date is fixed for doing any act, the Court may enlarge the time upon such terms and as the justice of the case may require even if the application was not filed till the expiration of the specified time. 6. The expression `Justice of the case may require' is equivalent to `in the interest of justice' or `ends of justice' . Thus, the paramount consideration under the scheme of the rules is to achieve justice rather than frustrate rights of the parties on technical ground, particularly when the rights of the other party can be protected by such terms as may appear in the opinion of the court to be just and proper. The High Court, Original Side rules, which will prevail and take precedence over the provisions of the Civil Procedure Code, also indicate that the provisions under the Rules are not as stringent as the provisions of the Code in regard to the defaults. The scheme of the High Court, Original Side Rules is that where the written statement is not filed as contemplated -9- under Rule 74, the course is not provided that a decree will follow as a natural consequence or automatically. The court is still to fix the suit as undefended and then pass such orders as it may deem fit and proper in the facts of the case including requiring the plaintiff to prove his claim. This may result in passing of a judgment and a decree but even before that stage, the defendant has been given liberty to take out a notice of motion for permission to file written statement and taking such other pleas in the suit which can be allowed by the court subject to such terms and conditions as may be deemed fit and proper in terms of Rule 91 of the said Rules. Interestingly, the provisions of Rule 265 are in addition to and not in derogation to the relevant provisions contained in Rules 88 to 91. Rule 266, in fact, completely dilutes the impact of specified period provided under other rules where the parties by consent in writing can enlarge the time for amending or filing pleadings or of filing and delivery of documents. This could be done without application to the court or even the Judge in chambers. It is apparent that the period indicated in these rules is directory and not mandatory. It is directory even to the extent of providing different options to the court and the parties can even get liberty to enlarge the time fixed by consent. -10- 7. We have just noticed that the provisions of the above-referred rules are alike the provisions of Rule 1 and Rule 10 of Order 8 though they are not identical. The language of these provisions has not even been worded as stringently as the provisions of the Code where the written statement is required to be filed under Order 8 within 30 days from the date of service of summons and maximum within 90 days. The provisions do not give any specific power to the court to extend the time beyond 90 days. Despite the use of such language in the provisions of the Code, the judicial discretion of the court to extend time has been a matter of legal scrutiny for quite some time and now, the law is well settled that in special circumstances, the court can even extend the time beyond the period of 90 days specified under Rule 1 Order 8. It will be useful to refer to the judgment where after discussing with some elaboration the judgments of the Supreme Court and other High Courts in the case of Indian Institute of Public Opinion Pvt. Ltd. v. Gopal Krishnan and another, 2006 (126) Delhi Law Times, 655, a Bench of Delhi High Court recorded the following findings:- “....... In order to make the facts clear, reference to the order of the Registrar dated 25th March, 2004 would be more appropriate, but vide that order the right of the plaintiff had not been closed by the order -11- of the Court. The Joint Registrar did not forfeit the right of the plaintiff to file written statement to the counter claim of the defendant, but only noticed it that no further opportunity can be granted to the plaintiff. The JR just stopped on passing an order to that effect, observing that the decree should be passed in terms of the provisions of Order 8 Rule 10 CPC in favour of the defendant or that the right of the plaintiff is forfeited. In fact the intent of the order was that the case be listed before the Court for appropriate directions. The doubt has been raised as to the competency of the Registry to pass an effective order for non-compliance or otherwise in relation to provisions of Order 8 Rule 10 relating to to filing of the written statement. It is not necessary for the Court to go into this question in the present case and that too at this stage of the proceedings. Suffice it to note that no effective order has been passed pronouncing a judgment against the plaintiff for non-compliance of the Order 8 Rule 10 CPC nor that the right stand forfeited. This order could be passed by the Court in its wisdom. The Court approved the order of the Joint Registrar and permitted the suit as well as the counter-claim to be proceeded further in accordance with law i.e. for admission/denial of documents and framing of issues. The provisions of Order 8 Rule 10 of the CPC are directory being part of the procedural law. They are not mandatory provisions which leaves no element of discretion with the Court in regard to passing an order as the Court may deem proper in the given facts. Reference can be made to the judgment of this Court in the case of Indradhanush TV Pvt. Ltd. Vs. National Film Development Corporation Ltd. ( S.No.232/2004 ) decided today itself where the Court after discussing and applying the judgment of the Supreme Court on facts held as under :- -12- “Whether the provisions of Order 8 Rules 1 and 10 of the Code are directory/regulatory or are mandatory is not more res integra and has been squarely answered by the Supreme Court in the case of Kailash Vs. Nanhku and Others (2005) 4 SCC 480 where the Supreme Court considered at great length the historical background of introduction of the amended provisions of Order 8 in the Code and their effect. It was held by the Court :- “41. Considering the object and purpose behind enacting Rule 1 of Order 8 in the present form and the context in which the provision is placed, we are of the opinion that the provision has to be construed as directory and not mandatory. In exceptional situations, the court may extend the time for filing the written statement through the period of 30 days and 90 days, referred to in the provision, has expired. However, we may not be misunderstood as nullifying the entire force and impact – the entire life and vigour – of the provision. The delaying tactics adopted by the defendants in law courts are not proverbial as they do stand to gain by delay. This is more so in election disputes because by delaying the trial of election petition, the successful candidate may succeed in enjoying the substantial part, if not in its entirety, the term for which he was elected even though he may lose the battle at the end. Therefore, the Judge trying the case must handle the prayer for adjournment with firmness. The defendant seeking extension of time beyond the limits laid down by the provision may not ordinarily be shown indulgence. -13- 42. Ordinarily, the time schedule prescribed by Order 8 Rule 1 has to be honoured. The defendant should be vigilant. No sooner the writ of summons is served on him he should take steps for drafting his defence and filing the written statement on the appointed date of hearing without waiting for the arrival of the date appointed in the summons for his appearance in the Court. The extension of time sought for by the defendant from the Court whether within 30 days or 90 days, as the case may be, should not be granted just as a matter of routine and merely for the asking, more so, when the period of 90 days has expired. The extension can be only by way of an exception and for reasons assigned by the defendant and also recorded in writing by the court to its satisfaction. It must be spelled out that a departure from the time schedule prescribed by Order 8 Rule 1 of the Code was being allowed to be beyond the control of the defendant and such extension was required in the interest of justice, and grave injustice would be occasioned if the time was not exercised. 43. A prayer seeking time beyond 90 days for filing the written statement ought to be made in writing. In its judicial discretion exercised on well-settled parameters, the court may indeed put the defendants on terms including imposition of compensatory costs and may also insist on an affidavit, medical certificate or other documentary evidence (depending on the facts and circumstances of a given case) being annexed with the application seeking extension of time so as to convince the court -14- that the prayer was founded on grounds which do exist. 44. The extension of time shall be only by way of exception and for reasons to be recorded in writing, howsoever brief they may be, by the court. In no case, shall the defendant be permitted to seek extension of time when the court is satisfied that it is a case of laxity or gross negligence on the part of the defendant or his counsel. The court may impose costs for dual purpose : (i) to deter the defendant from seeking any extension of time just for the asking, and (ii) to compensate the plaintiff for the delay and inconvenience caused to him. 45. However, no straitjacket formula can be laid down except that the observance of time schedule contemplated by Order 8 Rule 1 shall be the rule and departure therefrom an exception, made for satisfactory reasons only. We hold that Order 8 Rule 1, though couched in mandatory form, is directory being a provision in the domain of processual law.” Still in a more recent judgment again the Supreme Court in the case of Smt. Rani Kusum Vs. Smt. Kanchan Devi and Ors. JT 2005 (7) 409 discussed the principles governing provisions of Order 8 in the above regard with some elaboration and held as under :- “Next, there must be ever present to the mind the fact that our laws of procedure are grounded on a principle of natural justice which requires that men should not be -15- condemned unheard, that decision should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their absence and that they should not be precluded from participating in them. Of course, there must be exceptions and where they are clearly defined they must be given effect to. But taken by and large, and subject to that proviso, our laws of procedure should be construed, wherever that is reasonably possible, in the light of that principle.” In Topline Shoes Ltd. v. Corporation Bank (JT 2002 (5) SC 111), the question for consideration was whether the State Consumer Disputes Redressal Commission could grant time to the respondent to file reply beyond total period of 45 days in view of Section 13(2) of the Consumer Protection Act, 1986. It was held that the intention to provide time frame to file reply is really made to expedite the hearing of such matters and avoid unnecessary adjournments. It was noticed that no penal consequences had been prescribed if the reply is not filed in the prescribed time. The provision was held to be directory. It was observed that the provision is more by way of procedure to achieve the object of speedy disposal of the case. The use of the word “shall” in Order VIII Rule 1 by itself is not conclusive to determine whether the provision is mandatory or directory. We have to ascertain the object which is required to be served by this -16- provision and its design and context in which it is enacted. The use of the word “shall” is ordinarily indicative of mandatory nature of the provision but having regard to the intention of the legislation, the same can be construed as directory. The rule in question has to advance the cause of justice and not to defeat it. Construction of the rule or procedure which promotes justice and prevents miscarriage has to be preferred. The rules or procedure are handmaid of justice and not its mistress. In the present context, the strict interpretation would defeat justice. In construing this provision, support can also be had from Order VIII Rule 10 which provides that where any party from whom a written statement is required under Rule 1 or Rule 9, fails to present the same within the time permitted or fixed by the Court, the Court shall pronounce judgment against him, or make such other order in relation to the suit as it thinks fit. On failure to file written statement under the provision, the Court has been given the discretion either to pronounce judgment against the defendant or make such other order in relation to suit as it thinks fit. In the context of the provision, despite use of the word `shall', the court has been given the discretion to pronounce or not to pronounce the judgment against the defendant even if written statement is not filed and instead pass such order as it may think fit in relation to the suit. In construing the provision of Order VIII Rule 1 and Rule 10, the doctrine of harmonious construction is required to be applied. The effect would be that under Rule 10 of Order VIII, the court in -17- its discretion would have power to allow the defendant to file written statement even after expiry of period of 90 days provided in Order VIII Rule 1. There is no restriction in Order VIII Rule 10 that after expiry of ninety days, further time cannot be granted. The Court has wide power to `make such order in relation to the suit as it thinks fit'. Clearly, therefore, the provision