INDIAN OIL CORPORATION LIMITED vs BHIMASHANKAR

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IN THE HIGH COURT OF KARNATAKA



KALABURAGI BENCH

TH
DATED THIS THE 13 DAY OF OCTOBER, 2026

PRESENT

THE HON'BLE MR. JUSTICE ASHOK S. KINAGI

AND

THE HON'BLE MR. JUSTICE SUBRAMANYA RANGARAO

COMMERCIAL APPEAL NO.200010 OF 2025

BETWEEN:

INDIAN OIL CORPORATION LIMITED,
A GOVERNMENT OF INDIA UNDERTAKING,
HAVING ITS HEAD OFFICE AT MUMBAI,
REPRESENTED BY ITS AUTHORIZED OFFICER,
ST
BALLARY DIVISION OFFICE, 1 FLOOR,
PLOT NO.6, T.S.NO.78-84,
WARD NO.25, BLOCK NO.10,
PRAKASH PLAZA, INFANTRY ROAD,
CANTONMENT, BALLARY-583 104.

…APPELLANT

(BY SRI. GANESH SUBHASHCHANDRA KALBURGI, ADVOCATE)

AND:

1. SRI. BHIMASHANKAR
S/O CHANDRASHEKHAR BILGUNDI,
AGE: 70 YEARS, OCC: PRESIDENT,
HKE SOCIETY, RESIDING AT
BILGUNDI GARDEN,
SEDAM ROAD, KALABURAGI-585 102.

2. M/S. PRABHUDDA PETROLEUM,
PROPRIETOR: DATTATREYA








Digitally signed
by B NAGAVENI
Location: HIGH
COURT OF
KARNATAKA

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S/O RAJENDRAPPA,
INDIAN OIL DEALER, SEDAM ROAD,
KALABURAGI - 585 102.
RESIDING AT HOUSE NO. 91,
SEDAM ROAD, SWASTIC NAGAR,
NEAR KHARGE PETROL BUNK,
KALABURAGI.

…RESPONDENTS

(BY SRI. GOURISH S. KHASHAMPUR, ADVOCATE FOR R1;
NOTICE TO R2 IS DISPENSED WITH)

THIS COMMERCIAL APPEAL IS FILED UNDER SECTION 13
OF THE COMMERCIAL COURTS ACT 2015, PRAYING TO ALLOW
THIS APPEAL AND SET ASIDE THE JUDGMENT AND DECREE
DATED 02.08.2025 PASSED IN COM.O.S.NO.06/2022 ON THE
FILE OF THE PRINCIPAL DISTRICT AND SESSIONS JUDGE AT
KALABURAGI AND TO PASS ANY OTHER APPROPRIATE ORDERS
AS MAY BE DEEMED FIT IN THE FACTS AND CIRCUMSTANCES
OF THE CASE.

THIS APPEAL, COMING ON FOR HEARING, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE ASHOK S. KINAGI
AND
HON'BLE MR. JUSTICE SUBRAMANYA RANGARAO

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ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE ASHOK S. KINAGI)


1. This appeal is filed under Section 13(A) of the
Commercial Courts Act, challenging the judgment
and decree dated 02.08.2025 passed in Commercial
Original Suit No.06/2022 by the Principal District and
Sessions Judge, Kalaburagi.

2. For the sake of convenience, parties are referred to
as per their ranking before the Commercial Court.
The appellant was a defendant No.1, respondent
No.1 was the plaintiff and respondent No.2 was
defendant No.2.

3. Brief facts giving rise to filing of this appeal are as
follows:
The plaintiff filed the suit for recovery of money of
Rs.84,01,000/- along with interest at the rate of 18%
per annum from the date of due i.e., on 29.03.2018,
till the date of realization and also sought for

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perpetual injunction against the defendants, directing
them to demolish the existing structure constructed
on the suit property and to hand over the vacant
possession of the same in favour of the plaintiff.

4. It is the case of the plaintiff that the plaintiff is the
absolute owner and possessor of land bearing Survey
No. 71, measuring 100 feet × 25 feet, situated at
Badepur, Kalaburagi, and he got converted the said
land for use of non-agricultural purposes.

5. Defendant No.1 is a Government undertaking, Indian
Oil Corporation Limited, and Defendant No.2 is a
proprietary firm. Defendant No.2 is a dealer of the
retail outlet for selling its petroleum products. The
said suit schedule property was let out to Defendant
No.1 for a period of 25 years on monthly rent of
th
Rs.4,500/- for first 10 years; Rs.4,950/- from 11
th
year to 15 years; Rs.5,445/- per month from 16
th st
year to 20 year and Rs.5,989/- per month from 21

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th
Year to 25 year. It is contended that the said lease
period had expired in the month of February-2019.
After the expiry of lease period, defendant No.1
continued to be in possession of the suit schedule
property. Defendant No.1 installed an underground
tank in the suit property which is below the service
road of National Highway No.218. There is a violation
of safety Rules. The plaintiff addressed a letter to
Defendant No.2 stating that neither he is willing to
renew the lease agreement further nor sell the suit
property and he has decided to use his property for
his own use and requested the defendant No.1 to
handover the vacant possession of the property.
Defendant No.1 failed to hand over possession of the
suit schedule property even after the expiry of the
lease period and continued to remain in occupation
thereof. Hence, it is contended that the plaintiff is
entitled to damages for the use and occupation of the
suit schedule property.

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6. Defendant No.1, though appeared through counsel,
did not choose to file a written statement.

7. Defendant No.2 filed a written statement denying the
averments made in the plaint and prayed to dismiss
the suit against Defendant No.2. The Commercial
Court, based on the rival pleadings of the parties,
raised the following points for consideration:
“1. Whether the plaintiff proves that the
defendant No.1 is liable to pay a sum of
Rs.84,01,000/- along with interest at the rate
of 18% per annum, from the date of filing the
suit till its realization?
2. What order or decree?”

8. To substantiate his case, the plaintiff examined
himself as PW.1 and marked 33 documents as
Exs.P.1 to P.33. On the other hand, defendant No.1
neither produced any evidence nor cross-examined
the PW.1.

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9. The Commercial Court, hearing both sides and
assessing the oral and documentary evidence,
answered Point No.1 partly in the affirmative and
Point No.2 as per the final order. The suit of the
plaintiff was decreed with costs against Defendant
No.1. Defendant No.1 was directed to pay a sum of
Rs.81,76,000/- along with interest at the rate of
18% per annum from the date of the suit till its
realisation, by its judgment dated 02.08.2025.

10. The defendant No.1, aggrieved by the judgment and
decree dated 02.08.2025 passed in Commercial
O.S.No.6 of 2022, filed this appeal under Section
13(A) of the Commercial Courts Act.

11. Heard the learned counsel for defendant No.1 and
the learned counsel for the plaintiff.

12. Learned counsel for defendant No.1 submits that
PW.1 was examined on 23.07.2025 and got marked
documents. The Commercial Court, without providing

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an opportunity to defendant No.1 to cross-examine
PW.1, has taken the cross-examination of PW.1 as nil
on the ground that defendant No.1 did not file the
written statement. The arguments were heard on the
same day, and the judgment was posted on
02.08.2025. The suit of the plaintiff was decreed. He
submits that the impugned judgment passed by the
Commercial Court is in violation of the principles of
natural justice. He submits that even if defendant
No.1 has not filed the written statement, the
Commercial Court ought to have given an
opportunity to cross-examine PW.1. On these
grounds, he prays that the impugned judgment
passed by the Commercial Court is arbitrary and
erroneous and the appeal is required to be allowed.
Per contra
13. , learned counsel for the plaintiff submits
that the Commercial Court, despite granting
sufficient opportunity to defendant No.1, did not file
the written statement. He submits that the plaintiff

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was examined on the same day, and the Commercial
Court has rightly taken the cross-examination as nil,
as defendant No.1 failed to file the written
statement. He submits that the Commercial Court
has rightly decreed the suit. Hence, on these
grounds, he prays to dismiss the appeal.

14. Perused the records and considered the submissions
of learned counsel for the parties.

15. The points that would arise for our consideration are:

1. Whether the Commercial Court was
justified in declining to grant permission to
defendant No.1 to cross-examine PW.1, in
the absence of a written statement?

2. Whether defendant No.1 proves that the
impugned judgment passed by the
Commercial Court is in violation of the
principles of natural justice?

3. What order or decree?
Reg: Point Nos.1 and 2:

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16. Point Nos.1 and 2 are interlinked and therefore, they
are taken up together for discussion to avoid
repetition of facts.

17. The plaintiff has filed a suit for recovery of money,
alleging that the plaintiff is the owner and possessor
of the suit land and that he had let out the said land
in favour of defendant No.1 for a period of 25 years.
The said lease period having expired, defendant No.1
unauthorisedly continued in possession of the suit
schedule property and therefore, the plaintiff is
entitled to damages. To substantiate his case, the
plaintiff examined himself as PW.1 on 23.07.2025,
and the plaintiff has filed an application along with
the documents. The Commercial Court, without
giving an opportunity to defendant No.1 to file
objections to the application, has allowed the said
application and permitted the plaintiff to lead
evidence. The plaintiff entered the witness box and
filed his examination-in-chief in the form of an

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affidavit and marked 33 documents as Exs.P.1 to
P.33. We have perused the order sheet of
Com.O.S.No.6/2022 dated 23.07.2025, which reads
as follows:
“Plaintiff filed I.A. along with documents.
Other side absent. Hence I.A. allowed.
PW.1 present and further chief examined,
Exs.P.17 to 33 marked. Defendants and their
counsel called out absent. Hence cross-
examination of PW.1 is taken as nil. In this
case D-1 did not file any written statement.
Suit against D-2 was dismissed by the plaintiff.
Heard arguments.
For judgment by 02.08.2025.”

18. From the perusal of the impugned order sheet, it
indicates that the Commercial Court has not granted
sufficient opportunity to defendant No.1 to cross-
examine PW.1.

19. The Hon'ble Apex Court in the case of M/s Anvita
Auto Tech Works Pvt. Ltd., v.

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1
M/s Aroush Motors and Another held in
paragraph No. 26, which reads as follows:
26. The law regarding the mandatory filing of
Written Statement in a commercial dispute within
the statutory period is clearly envisaged under
Proviso to sub-rule (1) of Rule 1 of Order VIII
Code of Civil Procedure, 1908 (CPC) and Second
Proviso to Sub-rule (1) of Rule 1 of Order V CPC
as amended by the Special Amendment under the
Commercial Courts Act, 2015. The said provisions
impose an absolute embargo upon the courts to
accept the written statement after the expiry of
one hundred twenty (120) days. For easy
reference, the aforesaid bare provision of Proviso
to sub-rule (1) of Rule 1 of Order VIII CPC is
extracted herewith:
2) "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:
Provided that where the defendant fails to
file written statement within the said
period of thirty days, he shall be allowed to

1
2025 SCC Online SC 2181

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


20. The Hon'ble Apex Court further held in paragraph No.
32, which reads as follows:
“32. Thus, in the light of the aforesaid
discussion, we are of the considered view that the
present appeal deserves to be allowed and
accordingly, the same stands Allowed.
Consequently, the impugned judgment dated
20.05.2025 in Commercial Appeal No. 19 of 2023
and consequently the judgment and decree
passed in commercial suit No.372/2021 by the
Addl. City Civil and Sessions Judge (Exclusive
Commercial Court) dated 15.11.2022 quo

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defendant No.1 (Appellant herein) is set aside and
the matter is remanded back to the trial court to
dispose of the same after allowing the appellant
herein to file the Written Statement subject to
payment of cost to the tune of Rs.1,00,000/-
(Rupees One Lakh Only) and to permit the
appellant to exercise his right of cross-
examination of plaintiff's witnesses. The trial
court is requested to dispose of the present
commercial suit expeditiously and preferably
within a period of Six (6) months from today.”


21. Admittedly, in the instant case, defendant No.1 has
not filed the written statement. Though PW.1 was
examined on 23.07.2025, the Commercial Court, on
the same day, has taken the cross-examination as nil
on the ground that defendant No.1 has not filed the
written statement.

22. The procedure adopted by the Commercial Court is
contrary to the exposition of law laid down by the
Hon'ble Apex Court in the case of Ranjit Singh and

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2
Another v. State of Uttarakhand , wherein it is
held that the defendant can always cross-examine
the witnesses examined by the plaintiff to prove the
falsity of the plaintiff's case. A defendant can always
urge, based on the plaint and the evidence of the
plaintiff, that the suit was barred by a statute such
as law of limitation.

23. The procedure adopted by the Commercial Court
while disposing of the commercial suit is contrary to
the exposition of law laid down by the Hon'ble Apex
Court in the cases referred supra. Thus, the
impugned judgment passed by the Commercial Court
is arbitrary, perverse and in violation of principles of
natural justice. The same deserves to be set aside.

24. In view of the above discussion, we answer point
No.1 in the Negative and point No.2 in the
Affirmative .

2
2024 INSC 724

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25. Accordingly, we proceed to pass the following:
ORDER

i. The appeal is allowed .

ii. The judgment and decree dated
02.08.2025 passed in Commercial
O.S.No.06 of 2022 is set aside.

iii. Commercial O.S.No.6 of 2022 is restored to
its original position.

iv. Liberty is reserved to defendant No.1 to file
the written statement within 30 days from
the date of appearance before the
Commercial Court, subject to payment of
cost of Rs.1,00,000/- (Rupees One Lakh
only) payable to the District Legal Services
Authority, Kalaburagi District.

v. The parties are directed to appear before
the Commercial Court on 16.11.2026

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without awaiting any notice from the
Commercial Court.

vi. It is made clear that this Court has not
made any adjudication on the issues on
merit.

vii. All the contentions of the parties are kept
open.

viii. Registry is directed to transmit the records
to the Commercial Court forthwith.


Sd/-
(ASHOK S. KINAGI)
JUDGE


Sd/-
(SUBRAMANYA RANGARAO)
JUDGE
AMA,VNR
LIST NO.: 2 SL NO.: 43
CT:SI