Plaintiff In Commercial Suit Bound By 120-Day Time Limit To File Reply To Counterclaim: Supreme Court

The Supreme Court on Monday held that a plaintiff in a commercial suit cannot file a written statement to a defendant's counterclaim beyond the mandatory outer limit of 120 days prescribed under the Commercial Courts Act.

It ruled that the statutory timeline applicable to defendants equally governs plaintiffs replying to counterclaims.

A bench of Justices Sanjay Kumar and K. Vinod Chandran ruled that the mandatory timeline under the proviso to Order VIII Rule 1 of the Code of Civil Procedure applies to a plaintiff's written statement to a counterclaim in a commercial suit.

"Viewed thus, we answer the question posed in the affirmative. A plaintiff in a commercial suit, governed by the CC Act, is bound by the mandate of the proviso to Order VIII Rule 1 CPC, as applicable to a commercial suit, and must file a written statement to a counter-claim by a defendant therein, ordinarily within 30 days from the date of service of summons or receipt of the counter-claim, and in the event a plaintiff fails to file such a written statement within that time but offers sufficient cause for the delay, the Court may extend the time to do so, for reasons to be recorded in writing and upon payment of appropriate costs, but not beyond 120 days from the date of service of summons upon the plaintiff/receipt of the counter-claim by the plaintiff.", the top court ruled.

The decision came in appeals challenging two Calcutta High Court orders that had refused permission to file a written statement to a counterclaim after the expiry of the statutory period.

The dispute arose from a commercial recovery suit filed by A.K. Ghosh & Company against Biman Bose and others over alleged dues for the supply of printing paper. The respondents served their written statement along with a counterclaim on July 18, 2023. A.K. Ghosh & Company sought leave to file its written statement to the counterclaim only on March 15, 2024. By then, 238 days had elapsed.

One of the principal issues before the court was whether the mandatory timeline under the proviso to Order VIII Rule 1, as modified by the Commercial Courts Act, applied only to defendants filing written statements. The court also examined whether it governed plaintiffs replying to counterclaims.

Rejecting the Bombay High Court's interpretation, the bench held that Order VIII Rule 6G extends all rules governing written statements to written statements filed in answer to counterclaims. That includes the mandatory filing timeline.

"We, therefore, do not agree with the view taken by the Bombay High Court that the 'rules' referred to in Order VIII Rule 6G CPC only relate to the contents of a written statement to a counter-claim and have nothing to do with the time limit for filing of such written statement. The phrasing of Order VIII Rule 6G does not allow for any such restriction being read into the provision.", the court ruled.

The court also declined to accept the Madras High Court's view that the time for filing a written statement to a counterclaim begins only after the court fixes a timeline under Order VIII Rule 6A(3). It observed that such an interpretation would leave plaintiffs free to determine their own timelines whenever no specific period was fixed. That would frustrate the objective of speedy disposal of commercial disputes.

"According to the High Court, the clock would start ticking only when the Court fixes the time for filing such a written statement. However, this view of the High Court would mean that, in the event the Court fails to fix such time, the plaintiff is left free to devise his own time schedule to file such a written statement. This, obviously, could not have been the intendment of the statute.", the court noted.

Examining the evolution of the Code of Civil Procedure and the Commercial Courts Act, the bench observed that successive amendments consistently sought to tighten procedural timelines. Their objective was to reduce delays in commercial litigation. Reading the provisions together, the court concluded that applying the same outer limit to replies to counterclaims was consistent with that legislative purpose.

"This being the objective of the entire exercise, it would be counterproductive to construe the provisions of Order VIII CPC in a manner which would contribute to further delays instead of cutting them down.", the court held.

The court also upheld the Calcutta High Court's finding that the appeal itself was not maintainable. It held that an order refusing permission to file a belated written statement under Order VIII is not appealable under Section 13(1A) of the Commercial Courts Act. Such an order is not among those specified in Order XLIII of the Code of Civil Procedure or Section 37 of the Arbitration and Conciliation Act.

"In the light of the above statutory scheme and the decisions of this Court referred to hereinabove, it is clear that an appeal would lie under Section 13(1A) only if the order sought to be appealed against finds mention either in Order XLIII CPC or Section 37 of the Arbitration and Conciliation Act, 1996. As an order passed under Order VIII CPC is not appealable under Order XLIII CPC, the question of the plaintiffs maintaining an appeal against the order of the learned Judge denying them leave to file a belated written statement to the counter-claim raised by the contesting defendants does not arise.", the court ruled.

Accordingly, the court dismissed the appeals. It affirmed the Calcutta High Court's orders dated August 19, 2024 and February 26, 2025. The court also vacated the interim stay granted on May 23, 2025.

For Petitioner: Senior Advocate Jaideep Gupta, Advocates Soumitra Ghose Chowdhuri, Soumya Dutta, AOR, Suryanu Sengupta, Siddhant Upmanyu, Riddhi Bose, Racheeta Chawla, Sampriti Baksi, Rishi Agarwal, Advocates

For Respondent: Senior Advocate Rauf Rahim, Advocates Inadranil Ghosh, Palzer Moktan, Aanchal Tikmani, AOR, Mujadid Gilani, Ali Asghar Rahim, Tania Tamannah, Mohsin Rahim, Advocates