Babasaheb Raosaheb Kobarne & Anr. Vs Pyrotek India Private Limited & Ors. (Supreme Court of India)
Summary: The Supreme Court of India, in Babasaheb Raosaheb Kobarne & Anr. Vs Pyrotek India Private Limited & Ors., set aside the Bombay High Court judgment dated 13 December 2021, which had upheld the Commercial Court’s refusal to accept a written statement filed beyond the prescribed period in a commercial suit. The principal issue was whether the Supreme Court’s COVID-19 limitation-extension directions applied to the maximum 120-day period for filing a written statement under the Commercial Courts Act, 2015. The Supreme Court held that the exclusion of the period from 15 March 2020 to 28 February 2022 was applicable to the statutory deadline in the present case and directed that the written statement already filed by the defendants be taken on record.
Read HC Judgment in this case: COVID Limitation Order Does Not Extend Condonable Period: Bombay HC
The litigation originated from Commercial Suit No. 01 of 2020, instituted by Pyrotek India Private Limited against the defendants to restrain the alleged use, disclosure or distribution of its proprietary information and trade secrets. The defendants received summons on 10 January 2020 and obtained successive extensions for filing their written statement. The maximum period of 120 days was calculated to expire on 9 May 2020, during the nationwide COVID-19 lockdown. The defendants subsequently applied on 2 July 2020 to have their written statement accepted. However, the Commercial Court rejected their application on 28 January 2021, holding that the statutory period had expired. The defendants challenged that order before the Bombay High Court.
The Bombay High Court, by its judgment dated 13 December 2021, dismissed the writ petition. It relied principally on Sagufa Ahmed & Ors. Vs Upper Assam Polywood Products Private Limited and Ors., which distinguished between the prescribed limitation period and the additional period available for condonation of delay. The High Court reasoned that the initial 30-day period had expired before 15 March 2020 and that the Supreme Court’s earlier COVID limitation directions did not extend the subsequent discretionary period. It also considered SCG Contracts India Pvt. Ltd. Vs K.S. Chamankar Infrastructure Pvt. Ltd., which recognised the mandatory nature of the 120-day outer limit in commercial suits. On that basis, the High Court upheld the refusal to take the written statement on record.
On appeal, the Supreme Court considered its subsequent order dated 10 January 2022 in In Re: Cognizance for Extension of Limitation, passed in Miscellaneous Application No. 21 of 2022, together with its order dated 4 January 2022 in Centaur Pharmaceuticals Pvt. Ltd. & Anr. Vs Standford Laboratories Pvt. Ltd. The Supreme Court’s updated directions expressly excluded the period from 15 March 2020 to 28 February 2022 when computing limitation under general and special laws. They also addressed statutory outer limits within which courts or tribunals could condone delay and other prescribed procedural periods. The Court held that the Commercial Courts Act, 2015 was a special law to which those directions applied. Since the 120-day period in the present litigation would otherwise have expired on 9 May 2020, it fell within the excluded period.
Accordingly, the Supreme Court allowed the appeal, quashed the Bombay High Court judgment and directed the written statement already filed by the defendants to be taken on record and considered in accordance with law. It also directed the Trial Court to dispose of the pending interim injunction application expeditiously, preferably within six weeks from receipt of the Supreme Court’s order. The combined effect of the two judgments is that the Bombay High Court’s earlier refusal to extend the filing period was expressly reversed. The operative outcome is the Supreme Court’s direction permitting the written statement, based on the subsequently clarified COVID-19 limitation-exclusion framework.
List of Cases Discussed:
1. In Re: Cognizance for Extension of Limitation (Supreme Court); Miscellaneous Application No. 21/2022; 10/01/2022. Followed by the Supreme Court. Its directions excluding the period from 15 March 2020 to 28 February 2022 were applied to the 120-day written statement deadline under the Commercial Courts Act.
2. Centaur Pharmaceuticals Pvt. Ltd. & Anr. Vs Standford Laboratories Pvt. Ltd. (Supreme Court); SLP (C) No. 17298/2021; 04/01/2022. Considered by the Supreme Court along with the updated COVID-19 limitation directions when setting aside the High Court’s refusal to accept the written statement.
3. Sagufa Ahmed & Ors. Vs Upper Assam Polywood Products Private Limited and Ors. (Supreme Court); (2021) 2 SCC 317. Followed by the Bombay High Court in distinguishing the original limitation period from the additional period available for condonation. The High Court’s resulting decision was subsequently set aside.
4. M/s. SCG Contracts India Pvt. Ltd. Vs K.S. Chamankar Infrastructure Pvt. Ltd. & Ors. (Supreme Court); (2019) 12 SCC 210. Relied upon before the Bombay High Court concerning the mandatory 120-day outer limit for filing written statements in commercial suits.
5. In Re: Cognizance for Extension of Limitation (Supreme Court); (2020) 19 SCC 10; 23/03/2020. The original pandemic-related limitation order invoked by the defendants before the Bombay High Court.
6. Siddha Real Estate Development Private Limited Vs Golden Goenka Credit Private Limited (Calcutta High Court); GA No. 2 of 2020; 24/12/2020. Considered by the Bombay High Court concerning the effect of COVID limitation directions on the additional period for filing written statements.
7. Union of India Vs Rama Contractor (Delhi High Court); 2021 SCC OnLine Del 4350. Referred to by the Bombay High Court in support of its interpretation of the earlier Supreme Court limitation directions.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
Leave granted.
Feeling aggrieved and dissatisfied with the impugned judgment and order dated 13.12.2021 passed by the High Court of Judicature at Bombay in Writ Petition No.6191 of 2021, by which the High Court has dismissed the said writ petition and has confirmed the order passed by the learned Trial Court, refusing to take the written statement on record and has refused to condone the delay in filing the written statement, the original defendants have preferred the present appeal.
From the impugned judgment and order passed by the High Court, it appears that the High Court has refused to condoned the delay and take on record the written statement on the ground that the period of 120 days within which the written statement could have been taken on record, expired on 09.05.2020 which was during the lock-down imposed. Therefore, the High Court has refused to condone the delay and take the written statement on record.
Having heard the learned counsel appearing on behalf of the respective parties and having considered order dated 10.01.2022 passed by this Court in Miscellaneous Application No.21/2022 by which the following order was passed and order dated 04.01.2022 passed by this Court in SLP (C) No.17298/2021 in the case of Centaur Pharmaceuticals Pvt. Ltd. & Anr. Vs. Standford Laboratories Pvt. Ltd., the impugned order passed by the High Court is unsustainable. The operative portion of the order passed by this Court in Miscellaneous Application No.21/2022 reads as under –
“I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021. It is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings.
II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.
III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.
IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12 A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.”
In that view of the matter, the period from 15.03.2020 till 28.02.2022 shall have to be excluded for the purposes of limitation as may be prescribed under any General or SPECIAL LAWS in respect of all judicial or quasi-judicial proceedings. The Commercial Courts Act, 2015 being a Special Law, the said order shall also be applicable with respect to the limitation prescribed under the Commercial Courts Act, 2015 also.
In view of the above and for the reasons stated above and more particularly when the 120 days period expired in the present case on 09.05.2020 which was during the aforesaid period as prescribed by this Court in the aforesaid order, the High Court ought to have excluded the aforesaid period for the purpose of filing the written statement and ought to have permitted to take the written statement on record. The impugned judgment and order passed by the High Court refusing to condone the delay and take on record the written statement is hereby quashed and set aside. It is directed that the written statement, already filed, be taken on record and the same be considered in accordance with law.
It is reported that an interim injunction application is pending before the learned Trial Court since long. We direct the learned Trial Court to finally decide and dispose of the interim injunction application at the earliest and preferably within a period of six weeks from the date of receipt of the present order.
The Appeal is accordingly allowed to the aforesaid extent. No costs.
Leave granted.
The appeal is allowed in terms of the signed order.
Pending application(s) shall stand disposed of.
