M/S Anvita Auto Tech Works Pvt. Ltd vs. M/S Aroush Motors

REPORTABLE
2025 INSC 1202
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2025
(Arising out of Special Leave Petition (Civil) No. 21917 of 2025)
M/S ANVITA AUTO TECH WORKS PVT. LTD. ...APPELLANT
VERSUS
M/S AROUSH MOTORS & ANR. …RESPONDENT(S)
J U D G M E N T
ARAVIND KUMAR, J.
1. Heard. Leave Granted.
2. The present controversy can be encapsulated in words of the
Hon’ble Justice V.R. Krishna Iyer:
“ Procedural law is not to be a tyrant but a servant, not an
obstruction but an aid to justice. It is the handmaid of justice
and not its mistress”
3. The object of the procedural rules is to advance the cause of
justice and not to thwart it and when the rigid adherence to technicalities
of procedure causes injustice, courts have to come to the rescue by
adopting a liberal approach. The courts cannot countenance a situation
Signature Not Verified
Digitally signed by
CHETAN ARORA
Date: 2025.10.08
17:23:53 IST
Reason:
where substantial justice is sacrificed at the altar of procedural rigidity.
Where substantial justice is at stake, technicalities must give way to
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ensure that the litigant is afforded sufficient opportunity to defend. The
present controversy must be tested on the said principle.
4. The Appellant herein challenges the Impugned Judgement and
order dated 20.05.2025 passed by the High Court of Karnataka at
Bengaluru in Commercial Appeal No. 19 of 2023 which has affirmed the
Judgement and decree dated 15.11.2022 passed by the Additional City
Civil & Sessions Judge (Exclusive Commercial Court) in Original
Commercial Suit No. 372 of 2021 filed by the Respondent No. 1-M/s.
Aroush Motors for recovery of monies.
5. For convenience, we will be referring the parties as per their rank
before the Trial Court, as such, the Appellant herein being Defendant No.
1 and Respondent No. 1 & 2, being Plaintiff and Defendant No. 2,
respectively.
6. The facts shorn of unnecessary details are summarized
hereinunder:
7. The Defendant No. 1-M/s. Anvita Auto Tech Works Pvt. Ltd.
(Appellant-herein), launched a flagship motorcycle by the name of
CFMOTO in India in 2019 and invited applications for its dealership
across the country including Bengaluru City. Plaintiff-M/s. Aroush
Motors (Respondent No. 1-herein) applied and was provisionally
appointed dealer under a Letter of Intent dated 03.09.2019. In
consideration of the dealership, the plaintiff remitted a sum of Rs.
20,00,000/- (Rupees Twenty Lakhs Only) towards security deposit to
Defendant No. 1, incurred expenditure of rent and interiors for setting up
a showroom. Further, the plaintiff paid sum amount to Rs. 70,00,000/-
(Rupees Seventy Lakhs Only) towards spare parts, software, equipment
and initial stock of motorcycles. Moreover, additional sum of Rs.
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5,00,000/- (Rupees Five Lakhs Only) was remitted to Defendant No. 1
and on the advice of Defendant No. 1, the plaintiff also remitted Rs.
7,06,900/- (Rupees Seven Lakhs Six Thousand Nine Hundred Only) to
Defendant No. 2-Conair Equipment Pvt. Ltd (Respondent No. 2-herein)
for service centre equipment being its authorised service provider.
8. The Defendant No. 1 supplied Nineteen (19) motorbikes of BS-
IV Category to Plaintiff out of which the Eight (8) were sold. On
01.04.2020, the Government imposed ban on the sale of BS-IV Category
vehicles, as such, Defendant No. 1 imposed prohibition upon sale of the
such motorcycles but promised to supply Kits and Equipment to upgrade
the motorcycles to BS-VI Category. Nevertheless, due to the inability of
Defendant No. 1 to supply the same, the plaintiff’s business was stalled
and is said to have sustained substantial loss, following which, the
plaintiff terminated the dealership of Defendant No. 1 on 14.09.2020
alleging breach of obligations and sought recovery of monies invested by
way of filing the present Commercial Original Suit (Com. O.S.) No. 372
of 2021 claiming a sum of Rs. 1,78,03,090/- (Rupees One Crore
Seventy-Eight Lakhs Three Thousand Ninety Only) from Defendant No.
1 with an Interest of 18% (Eighteen Percent) and Rs. 7,06,900/- (Rupees
Seven Lakhs Six Thousand Nine Hundred Only) from Defendant No. 2
with an Interest of 18% (Eighteen Percent) till the realization of
payments along with 3 (Three) Interim Applications (IAs) No. I to III.
9. After the service of summons, the Defendant No. 1 appeared on
07.08.2021 but did not file the Written Statement on the said date. Later
Defendant no. 1 preferred I.A. No. IV seeking extension of time to file
Written Statement on 07.09.2021. Meanwhile, the 3 (three) I.As which
were filed with Com. OS No. 372 of 2021, came to be decided by way of
order dated 30.10.2021 wherein IA No. 1 which sought direction to
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defendant no. 1 to take back the remaining motorcycles from possession
of plaintiff was allowed, but the other two IAs which had sought for
mandatory injunction against Defendant No. 1 & 2, respectively, to
refund the monies were directed to be kept in abeyance for consideration
along with main suit since the nature of relief was that of final in nature.
10. On 14.11.2021, the time period of 120 days as prescribed under
the law for filing Written Statement in a commercial suit expired and
Defendant No. 1 again preferred I.A. No. 5 under section 148 of the
Code of Civil Procedure, 1908 (hereinafter to be referred as “CPC”)
seeking extension of time to file Written Statement. The plaintiff filed its
objection to I.A. No. 5 on 06.12.2021 and preferred I.A. No. 6 under
section 151 of CPC seeking to strike out the defence. However, while the
said IAs were pending objections, the defendant no. 1 on 07.01.2022
preferred I.A. No. VI/6A along with Written Statement seeking
permission to file the same by seeking condonation of delay on the
premise that the delay was due to non-residing of the defendant no. 1 in
Bengaluru and COVID-19.
11. The said IA came to be Rejected by order dated 22.03.2022 by
the Trial Court and consequently, the Written Statement also came to be
rejected. The Defendant No. 1 challenged the order of dismissal of IA by
way of Commercial Appeal bearing No. 189 of 2021. Meanwhile, the
Written Statement on behalf of Defendant No. 2 was also taken as Nil.
The suit progressed subsequently to the stage of recording plaintiff’s
evidence and on 30.07.2022, 10.08.2022 and on 19.08.2022 the
examination-in-chief of PW1 was recorded and cross-examination of the
defendant was taken as Nil by the Trial Court on the ground that
defendant had failed to file their Written Statement within Stipulated
time and the matter was posted for defendant’s evidence.
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12. Ultimately, the suit came to be partly decreed on 15.11.2022
wherein Defendant No.1 was directed to pay sum of Rs. 1,78,03,090/-
(Rupees One Crore Seventy-Eight Lakhs Three Thousand Ninety Only)
and Defendant No. 2 was directed to pay Rs. Rs. 7,06,900/- (Rupees
Seven Lakhs Six Thousand Nine Hundred Only) with future interest of
9% (Nine Percent) per annum each from the date of suit till realization.
Consequently, in the light of the judgement and decree, the Commercial
Appeal No. 189 of 2022 came to be dismissed as withdrawn.
13. The Defendant No.1 being aggrieved by the judgement and
decree of the Trial Court preferred Commercial Appeal No. 19 of 2023
which came to be dismissed by the Impugned Order dated 20.05.2025.
Hence, the present appeal.
14. We have heard the Learned Counsels appearing on behalf of the
parties and perused the material on record.
SUBMISSIONS ON BEHALF OF THE APPELLANT-
DEFENDANT NO. 1
15. Shri Pb. Suresh, Learned Senior Counsel appearing on the behalf
of the appellant submitted that court below erred in rejecting the written
statement dated 07.01.2022 which is in contravention of the orders
passed by this Court in Suo Moto Writ Petition (C) No. 3 of 2020
extending the limitation due to COVID-19 wherein the limitation period
between 15.03.2020 to 28.02.2022 was waived off in all cases including
commercial disputes. To buttress his contention, the learned senior
counsel has relied upon the decisions of this court in Babasaheb
Raosaheb Kobarne & Anr. v. Pyrotek India Private Limited and Ors.
2022 SCC SC 1315 and Prakash Corporates v. Dee Vee Projects
Limited (2022) 5 SCC 112.
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16. The Learned Senior Counsel further submitted that failure on the
part of the defendant to file the Written Statement within the time
permitted by the court would not tantamount to pronouncement of
judgment against the defendant. To back the said contention, the learned
senior counsel relies upon the decision of this court in Asma Lateef v.
Shabbir Ahmad (2024) 4 SCC 696.
17. The Learned Senior counsel vehemently submitted while placing
reliance upon the decision of this court in Ranjit Singh v. State of
Uttarakhand, 2024 INSC 724 that even without filing of written
statement, the right to cross-examine survives and not permitting the
same has resulted in petitioner’s substantial rights being defeated without
adjudication on merits.
18. He further submitted that Order VIII Rule 10 CPC does not
empower the court to automatically pass a decree merely because a
written statement is not filed. The court must still assess whether a prima
facie case is made out and in the present case, the decree was passed
summarily without such satisfaction being recorded.
19. He lastly submitted that if the impugned decree is executed, it
would cause severe and irreparable loss to the petitioner despite him not
having had a fair opportunity to contest the claim and it is settled
principle that procedural rules must not be used to defeat substantial
justice.
SUBMISSION ON BEHALF OF THE RESPONDENT NO. 1-
PLAINTIFF
20. Per contra, Shri Balaji Srinivasan, learned counsel appearing on
behalf of the respondent no. 1 submits that the right of cross-examination
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on the part of defendant No. 1 stood forfeited on account of non-filing of
written statement. The High Court has rightly concluded that despite
repeated and adequate opportunities afforded to the defendant No. 1, he
wilfully chose not to exercise his right of cross-examination.
21. The Learned Counsel further submits that at no stage during the
proceedings before the trial court did the defendant no. 1 Company chose
to file an application for recall of the order closing the stage for cross-
examination of PW1 nor did it file any appeal or writ petition challenging
such order of closing the stage. Thus, defendant No.1 had acquiesced and is
now estopped from raising such plea at this belated stage especially when
defendant no. 1 did not take such a ground even in the memo of appeal.
22. The Learned counsel also submitted that Defendant No. 1 has
approached this Court with unclean hands. Its conduct before the courts
below reveal a consistent pattern of dilatory tactics, false pleadings, and
abuse of process. It failed to file the Written Statement within the statutory
period, allowed the opportunity of cross-examination to lapse and never
challenged the orders closing its right to cross-examination at the first
instance. Hence, the present Special Leave Petition is only a last-ditch
attempt to obstruct & delay the lawful execution of the decree.
ISSUE FOR CONSIDERATION
23. This Court while issuing notice in the present special leave petition
on 18.05.2025 was of the view that the only issue that arises for
consideration is:
“Whether the High Court was correct in observing that
on account of non-filing of written statement by the
defendant, his right to cross-examination is taken
away?”
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24. Before we delve into the merits of the case, it is apposite to lay
down the chronology of factual matrix pertaining to stage of suit especially
which are central to the determination of the present dispute as emerges
from the perusal of the material on record.

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25. The aforesaid chart clearly reveals that though the summons was
served upon the defendant no. 1 company on 17.07.2021, they could not
file the Written Statement up till 07.01.2022 which was long after the
statutory period of 120 days had already expired on 14.11.2021.
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:
“ 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 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 shall forfeit the right
to file the written statement and the court shall not allow the
written statement to be taken on record.”
27. The mandatory nature of statutory period in filing WS in a
commercial dispute stood fortified by the decision of this court in SCG
Contracts (India) Pvt. Ltd. v. K.S. Chamankar Infrastructure Private
Limited and Ors. (2019) 12 SCC 210 wherein this court held that
timeline of 120 days’ fixed by the statute is not directory but rather
mandatory, therefore, commercial courts cannot condone the delay
beyond 120 days in filing the WS. On this very aspect the appeal could
have been dismissed nevertheless, there is something more vital to the
present issue which this court cannot lose sight of.
28. The meticulous scrutiny of the chronological chart as mentioned
supra shows that the limitation period for filing the WS commenced on
17.07.2021 and ended on 14.11.2021. Both these dates fell at a time
when our nation was in garb of global pandemic of COVID-19 which
affected the lives of millions of people around the world as well our
judicial systems. This court was conscious of the fact as to the difficulty
faced by the litigants in approaching the courts physically and was of the
view that the said pandemic should not become the reason to vandalise
the rights of the litigants due to expiry of period of limitation who could
have approached the court well within the time had it not been for the
pandemic. Hence this court In Re: Cognizance for Extension of
Limitation (2022) 3 SCC 117 in Suo Moto Writ Petition (C) No. 3 of
2020 by exercise of its powers under Article 142 of the Constitution of
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India passed series of orders to exclude the period commencing from
15.03.2020 till 28.02.2022 for the purpose of computing the limitation
period under any general or special laws in respect of all judicial or
quasi-judicial proceedings. For the purpose of reference, the relevant
portion of the order is extracted below:
“…….
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 quasijudicial 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.
……”
29. This court in Aditya Khaitan & Ors. v. IL & FS Financial
Services Limited 2023 INSC 867 had encountered a similar situation
wherein the High Court had disallowed the appellant to file the Written
Statement in a commercial dispute on the premise that the same was
beyond the mandatory statutory period of 120 days. This Court while
relying upon the orders passed In Re: Cognizance for Extension of
Limitation (Supra) allowed the appeal and directed the Written
statement to be taken on record. Further this court in Babasaheb
Raosaheb Kobarne & Anr. v. Pyrotek India Private Limited & Ors.
2022 SCC OnLine SC 1315 and Prakash Corporates v. Dee Vee
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Projects Limited (2022) 5 SCC 112 had allowed the appellant to file its
written statement notwithstanding the fact that it was filed beyond the
period of 120 days in the light of the COVID-19 pandemic wherein the
period of limitation was extended as stated supra.
30. Relegating back to the facts of the instant case, the statutory
period of 120 days commenced from date of service of summons on
17.07.2021 and as per section 9 of the General Clauses Act, 1897, the
date of service had to be excluded therefore, from 18.07.2021, the 120
days’ period commenced and it ended on 14.11.2021. In the light of
aforesaid discussion, it can be very well said that both the dates fell
within the sweep of period between 15.02.2020 to 28.02.2022. In fact,
during this period itself, to be precise on 24.11.2021 itself defendant
No.1 had filed I.A. No.5 seeking enlargement of time to file written
submission and subsequently on 07.01.2022 had filed IA No.VI/ 6A
seeking permission to file written submission enclosing the written
submission also. Therefore, the High Court ought to have excluded the
aforesaid period for the purpose of filing the written statement and ought
to have permitted the defendant No.1 to file written statement on record
and contest the suit on merits rather than dismissing the appeal.
31. There is another consideration why the present appeal deserves
to be allowed. The perusal of the records particularly, the order sheet of
the trial court dated 19.08.2022 (Annexure P-17) clearly reveal that after
the examination-in-chief of PW1 was closed, the cross-examination of
Defendant no. 1 was taken as “Nil” on the ground that defendant had
failed to file their written statement within stipulated time. The said
reason is absolutely perverse and is contrary to the right of defence
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available to the defendant. The purpose of cross-examination is to elicit
the truth from the witness and impeach its credibility. When the WS was
not allowed to be taken on record, the denial of the right to cross-
examine cannot be taken away by leaving the defendant in lurch and this
has acted as final nail in the coffin to defendant’s right of defence. This
court not long back in Ranjit Singh v. State of Uttarakhand, 2024 INSC
724 had held that even when the defendant has not filed the Written
statement, his right to cross-examine the plaintiff witnesses is not
foreclosed. The relevant portion of the decision for easy reference is
extracted herewith:
“5…….At this stage, we must clarify the legal position. Even if a
defendant does not file a written statement and the suit is
ordered to proceed ex-parte against him, the limited defence
available to the defendant is not foreclosed. A 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 the law of
limitation…..”
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 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/-
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(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.
…………..................J.
(ARAVIND KUMAR)
………….................J.
(N.V. ANJARIA)
New Delhi;
th
October 08 , 2025.
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