Bombay High Court Sets Aside Order Striking Off Written Statements In Tata Steel Stockyard Licence Fee Dispute

On 28 April, the Bombay High Court set aside a Commercial Court order that had struck off the written statements filed by I K Marine Agencies Pvt Ltd and Gateway Distriparks Ltd in a dispute with Tata Steel concerning recovery of licence fees and related charges for use of a stockyard at Kalamboli, Navi Mumbai.

A Single Judge Bench of Justice N.J. Jamadar held that Commercial Courts must adopt a nuanced approach while considering condonation of delay between 30 and 120 days for filing written statements, and should ordinarily favour condonation within this window after assessing the reasons, rather than applying strict rigidity. He observed:

“In my considered view, a little nuanced approach is required to be adopted in a commercial suit, where the defendant seeks condonation of delay between initial 30 days and upto 120 days. A strict rigour which may apply in a ordinary suit for condonation of delay may not be apposite when the Commercial Court condons the delay beyond the initial 30 days and upto 120 days.”

Tata Steel filed the commercial suit seeking recovery of dues arising from the use of its stockyard at Kalamboli. The Court issued summons between July and August 2024, and the defendants entered appearance on 29 August 2024. They moved applications seeking extension of time to file written statements, which the Commercial Court allowed on 26 September 2024.

The defendants filed the written statements on 16 December 2024. However, the Commercial Court struck them off the record after holding that they exceeded the 120-day limit.

Before the High Court, the defendants argued that the Commercial Court miscalculated the limitation period and that they had filed the written statements within time. They also contended that valid service of summons required delivery of the plaint and accompanying documents.

On the issue of service, the High Court held that mere service of summons without the plaint and its accompaniments does not trigger the 120-day period for filing a written statement. The Court ruled that time begins to run only when the defendant receives the complete set of pleadings. It held:

“If the Defendant is not equipped to ascertain the case he is to meet, mere service of summons sans the plaint and its accompaniments would not constitute compliance of the statutory mandate so as to make the time to file written statement run qua the defendant.”

The Court further held that procedural rules under Order VIII Rule 1 of the Code of Civil Procedure serve to advance justice and cannot defeat substantive rights. It reiterated that courts should not allow technical objections to override adjudication on merits where written statements are filed within the statutory framework. The Bench observed:

“The approach of the Court ought to be informed by the postulate that, ultimately the provisions of Order VIII rule 1 are procedural. Procedure is handmaid of justice. Procedure ought not to be allowed to score a march over the substantive justice.”

Accordingly, the High Court quashed and set aside the Commercial Court's order and directed that the written statements filed by the defendants be taken on record. It also directed that the suit proceed in accordance with law.

For Petitioner: Advocates Vaibhav Ugle, Vikas Somawanshi, Prashant Mahajan, Aditya Shinde, Kalpana Pandey, Mangesh M. Patel

For Respondent: Advocates Bhushan Deshmukh, H.N.Vakil, Samkit Shah, Farhad Vakil i/by Mull and Mulla and Craigie Blunt and Caroe