M/S Schliff Maschinnen Fabrik Vs Canara Bank

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NC: 2025:KHC:13078 WP No. 32236 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 27^TH DAY OF MARCH, 2025

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BEFORE

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THE HON'BLE MR JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 32236 OF 2024 (GM-DRT)

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BETWEEN:

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M/S. SCHLIFF MASCHINNEN FABRIK NO.21/1, MAKARPURA INDUSTRIAL ESTATE GIDC, MAKARPURA VODODARA – 390 010 REPRESENTED BY ITS PROPRIETOR SHASHISHEKHAR SHARMA, S/O S.L. SHARMA AGED ABOUT 54 YEARS.

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…PETITIONER

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(BY SRI VASANTHA A.K., ADVOCATE)

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AND:

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CANARA BANK

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Digitally signed by NAGAVENI Location: High Court of Karnataka

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NELAMANGALA BRANCH B.H.ROAD, NELAMANGALA, BANGALORE RURAL DISTRICT - 562 123 BY ITS MANAGER SMT. SABITHA S. SHETTY W/O SHAILESH SHETTY AGED ABOUT 50 YEARS.

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T.R.RAGHAVENDRA RAO S/O T.R.RAMACHANDRA RAO AGED ABOUT 50 YEARS, PROPRIETOR VASISTA TECHNOLOGIES NO.316, 4^TH CROSS,

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VIDYAMANYA NAGAR ANDRAHALLI MAIN ROAD, NEAR PEENYA 2^ND STAGE, BENGALURU – 560 091.

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…RESPONDENTS

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(BY SRI VIGNESH S. SHETTY, ADVOCATE FOR R-1)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO SETTING ASIDE THE ORDER DTD 9.08.2023 PASSED BY THE HON’BLE DEBTS RECOVERY TRIBUNAL-II ON IA NO. 2786/2021 IN OA NO. 1284/2019 VIDE ANNX-A

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE M.NAGAPRASANNA

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ORAL ORDER

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The petitioner is before this Court calling in question an order dated 9-8-2023 by which, the application in IA No. 2786 of 2021 seeking to condone the delay in filing written statement comes to be rejected in OA No.1284 of 2019.

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The 1^st respondent/Bank approaches the Debts

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Recovery Tribunal-II in OA No.1284 of 2019 for recovery of money from the defendants. The issue in the lis does not

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relate to the merit of the matter before the concerned Court. The petitioner/the 2^nd defendant in OA 1284 of 2019 does not file his written statement as obtaining in section 19(5)(i) of the Recovery of Debts and Bankruptcy Act, 1993 (‘RDB Act’ for short). The petitioner had also preferred an application seeking condonation of delay in IA 2786 of 2021 for having filed the written statement beyond the period of limitation that is prescribed under section 19(5)(i) of the RDB Act.

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The Tribunal, in terms of the impugned order dated 09-08-2023, rejects the application for condonation of delay and consequently filing of written statement gets forfeited on such delay. The reason rendered by the Tribunal is in terms of the mandate of the Statute, as obtaining in Section 19(5) of the RDB Act, which mandates that the written statement and counterclaim are required to be filed mandatorily within 30 days from the date of service of summons, another 15 days to the maximum could be granted in exceptional or special circumstances. The rejection of the application by the Tribunal is what has driven the petitioner to this Court in the subject petition.

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NC: 2025:KHC:13078 WP No. 32236 of 2024

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Heard Sri Vasantha A K, learned counsel appearing for petitioner and Sri Vignesh Shetty, learned counsel appearing for respondent No.1/Bank.

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The learned counsel appearing for the petitioner submits that the limitation ought to have been extended at the time when written statement was filed.

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The learned counsel appearing for the 1^st

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respondent/Bank Sri Vignesh Shetty would vehemently refute any indulgence being shown, as the mandate of the statute cannot be given a go bye, by any reason projected, by the petitioner. Therefore, he would seek dismissal of the petition, on the ground that the evidence in the matter is over and the Tribunal has kept the matter for its judgment.

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The afore-narrated facts are not in dispute. The issue

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lies in a narrow compass. Pursuant to the OA instituted by the Bank; the notice is issued; the same is served upon the present petitioner and vakalath is filed on 22-10-2020. Therefore, the

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limitation would get over within 30 days or at the maximum 45 days from 22-10-2020. The limitation for filing of the written statement would commence from the date the paper book is served on the petitioner which happens on 15-02-2021.

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It is in public domain that the nation was under complete lockdown from 25-3-2020. Owing to such lockdown, the Apex Court by several orders extended the limitation prescribed under every statute and the last of the extension from time to time passed by the Apex Court was on 23.09.2021. In identical circumstance, where written statement had not been filed within the limitation prescribed before the Commercial Court, in a commercial suit under the Commercial Courts Act, the Apex Court observing the situation during the COVID period extended the limitation in the case of ADITYA KHAITAN V. IL & FS FINANCIAL SERVICES LTD., reported in (2023) 9 SCC 570. It reads as under:

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“…. …. ….

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22. A perusal of para 2.3 of the above order shows that this Court directed that the period from 15-32020 till 14-3-2021 will stand excluded in computing:

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( a ) the period prescribed under Sections 23(4) and 29-A of the Arbitration and Conciliation Act, 1996;

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( b ) Section 12-A of the Commercial Courts Act, 2015;

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( c ) provisos ( b ) and ( c ) of Section 138 of the Negotiable Instruments Act, 1881; and

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( d ) any other laws which prescribe period of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay ) and termination of proceedings.

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23. As would be clear from hereinabove, the very basis of the judgment in Sagufa Ahmed [ Sagufa Ahmed v. Upper Assam Plywood Products (P) Ltd. , (2021) 2 SCC 317 : (2021) 2 SCC (Civ) 178] that under the 23-3-2020 [ Cognizance for Extension of Limitation, In re , (2020) 19 SCC 10 : (2021) 3 SCC (Cri) 801] order, only the period of limitation has been extended and not the period up to which delay can be condoned, has been taken away by expanding the protection by excluding the period even for computing outer limits within which the court or tribunal can condone delay . This is an important subsequent aspect which has a great bearing in deciding the present controversy.

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24. Prakash Corporates [ Prakash Corporates v. Dee Vee Projects Ltd. , (2022) 5 SCC 112 : (2022) 3 SCC (Civ) 121 : (2022) 2 SCC (Cri) 290 : (2022) 1 SCC (L&S) 771] also notices the fact that the order of 8- 3-2021 [ Cognizance for Extension of Limitation, In re , (2021) 5 SCC 452 : (2021) 3 SCC (Civ) 40 : (2021) 2 SCC (Cri) 615 : (2021) 2 SCC (L&S) 50] and subsequent orders also by a Bench of three Hon'ble Judges were not and could not have been available for the Bench which decided Sagufa Ahmed case [ Sagufa Ahmed v. Upper Assam Plywood Products (P) Ltd. , (2021) 2 SCC 317 : (2021) 2 SCC (Civ) 178] since Sagufa Ahmed case [ Sagufa Ahmed v. Upper Assam Plywood Products (P) Ltd. , (2021) 2 SCC 317 : (2021) 2 SCC (Civ) 178] was decided on 18-9-2020. In Prakash

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NC: 2025:KHC:13078 WP No. 32236 of 2024

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Corporates [ Prakash Corporates v. Dee Vee Projects Ltd. , (2022) 5 SCC 112 : (2022) 3 SCC (Civ) 121 : (2022) 2 SCC (Cri) 290 : (2022) 1 SCC (L&S) 771] , though the period of 30 days for filing written statements expired on 5-2-2021 and the 120-day outer limit expired on 6-5-2021, written statements notarised on 7-7-2021 was directed to be taken on record. The Court in Prakash Corporates [ Prakash Corporates v. Dee Vee Projects Ltd. , (2022) 5 SCC 112 : (2022) 3 SCC (Civ) 121 : (2022) 2 SCC (Cri) 290 : (2022) 1 SCC (L&S) 771] relied on the orders of 23-3-2020 [ Cognizance for Extension of Limitation, In re , (2020) 19 SCC 10 : (2021) 3 SCC (Cri) 801] , 8-3-2021 [ Cognizance for Extension of Limitation, In re , (2021) 5 SCC 452 : (2021) 3 SCC (Civ) 40 : (2021) 2 SCC (Cri) 615 : (2021) 2 SCC (L&S) 50] , 27-4-2021 [ Cognizance for Extension of Limitation, In re , (2021) 17 SCC 231 : 2021 SCC OnLine SC 373] and also noticed the order of 23-92021 [ Cognizance for Extension of Limitation, In re , (2021) 18 SCC 250 : 2021 SCC OnLine SC 947] while so ordering.

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25. By virtue of Section 16 of the Commercial Courts Act, 2015 brought into force on 23-10-2015 some provisions of the Code of Civil Procedure, 1908 in its application to the commercial disputes were amended. The Schedule to the Commercial Courts Act amended Order 5 Rule 1(1), Order 8 Rule 1and Order 8 Rule 10 insofar as their applicability to commercial disputes was concerned. Order 8 Rule 1 reads as under:

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Order 8 Rule 1

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“ 1. Written statement .—The defendant shall, within thirty days from the date of service of summons on him, present a written statement of his defence:

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Provided that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the written statement on such other day, as may be specified by the court, for reasons to be recorded in writing and on payment of such costs as the court deems fit, but which shall not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred twenty days from the date of service of summons, the defendant

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shall forfeit the right to file the written statement and the court shall not allow the written statement to be taken on record.”

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26. As would be seen from the above, the outer limit within which the court or tribunal can condone the delay is 120 days from the date of summons.

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27. As has been set out hereinabove, while summons was served on 7-2-2020, the 30 days' period expired on 8-3-2020 and the outer limit of 120 days expired on 6-6-2020. The application for taking on record the written statements and the extension of time was filed on 20-1-2021. Applying the orders of 8-3-2021 [ Cognizance for Extension of Limitation, In re , (2021) 5 SCC 452 : (2021) 3 SCC (Civ) 40 : (2021) 2 SCC (Cri) 615 : (2021) 2 SCC (L&S) 50] and the orders [ Cognizance for Extension of Limitation, In re , (2021) 17 SCC 231 : 2021 SCC OnLine SC 373] , [ Cognizance for Extension of Limitation, In re , (2021) 18 SCC 250 : 2021 SCC OnLine SC 947] made thereafter and excluding the time stipulated therein, the applications filed by the applicants on 19-1-2021 are well within time. The judgment passed by the High Court, for the reasons set out hereinabove, needs to be set aside. The principle underlying the orders of this Court dated 8-3-2021 [ Cognizance for Extension of Limitation, In re , (2021) 5 SCC 452 : (2021) 3 SCC (Civ) 40 : (2021) 2 SCC (Cri) 615 : (2021) 2 SCC (L&S) 50] , 27-4-2021 [ Cognizance for Extension of Limitation, In re , (2021) 17 SCC 231 : 2021 SCC OnLine SC 373] and 23-9-2021 [ Cognizance for Extension of Limitation, In re , (2021) 18 SCC 250 : 2021 SCC OnLine SC 947] , in Cognizance for Extension of Limitation, In re , albeit those orders being passed, subsequent to the impugned order [ IL & FS Financial Services Ltd. v. Aditya Khaitan , 2021 SCC OnLine Cal 4293] , would enure to the benefit of the applicants-defendants.”

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(Emphasis supplied)

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In the case at hand, the paper book was served upon the petitioner on 15.02.2021. Therefore, even if 45 days is taken as the period of limitation, it would undoubtedly come within the extension of limitation granted by the Apex Court, which is upto 23.09.2021. If the petitioner had filed his written statement after the date fixed by the Apex Court as observed hereinabove, it would be an altogether different circumstance.

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Therefore, the impugned order of the concerned Court would completely run counter to what the Apex Court has directed and would become unsustainable. Notwithstanding such sustainability, if the Tribunal has proceeded to record the evidence and posted the matter for judgment, it has proceeded on a proceeding which is entirely a nullity in law.

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