IDFC FIRST BANK LTD AND ANR vs SHYAMSUNDAR DISTRIBUTOR AND ANR
- Court
- Calcutta High Court
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE DIVISION
APPELLATE SIDE
Present:
The Hon’ble Justice Debangsu Basak
And
The Hon’ble Justice Md. Shabbar Rashidi
FMA 1389 of 2025
IA No. CAN 1 of 2025
IDFC First Bank Limited And Another
Vs.
Shyamsundar Distributor And Another
For the appellants : Mr. Ranjit Singh, Adv.
Mr. Shounak Mukhopadhyay, Adv.
Mr. Amar Singh, Adv.
Mrs. Tutul Das, Adv.
Ms. S. Mukherjee, Adv.
For the respondents : Mr. Ejaz Khan, Adv.
Mr. Pradip Kumar De, Adv.
Mr. Debnath Mahata, Adv.
Hearing concluded on : 05.05.2026
Judgment on : 18.05.2026
Md. Shabbar Rashidi, J.:-
1. Order No. 12 dated July 10, 2025 passed by learned Judge,
th
V Bench, City Civil Court in Title Suit No. 2334 of 2023 has been
2
assailed in the present appeal at the behest of the defendant in the
suit.
2. By the impugned order, the learned Trial Court dismissed the
application under Section 5 and Section 8 of Arbitration and
Conciliation Act, 1996 filed on behalf of the defendant in the suit on
the ground that the same was filed by the defendant beyond the
period of limitation prescribed for filing written statement. By the
impugned order, the learned Trial Judge, on account of failure of the
defendant/appellant in submitting his written statement, also struck
off the defence of appellant in the suit with an exception of right to
cross-examine the witnesses, to be produced on behalf of the
plaintiff/respondent.
3. It was submitted on behalf of the appellant that the learned
Trial Judge failed to appreciate that the disputes covered under T.S.
No. 2334 of 2023 were squarely covered under arbitration agreement
dated March 31, 2018 duly executed by and between the parties. The
agreement dated March 31, 2018 contained a valid arbitration clause
and therefore, the disputes ought to have been referred to arbitration
as per the terms of the loan agreement. According to learned advocate
for the appellant, the learned Trial Court was under obligation to refer
the parties to arbitration on the basis of a valid arbitration agreement
existing between the parties.
3
4. Learned advocate for the appellant also submitted that the
civil suit was filed by the plaintiff/respondent in an attempt to defeat
the legitimate claim of the appellant/defendant overlooking the
arbitration agreement. It was also contended by learned advocate for
the appellant that the learned Trial Court, while passing the
impugned order, did not take into consideration the fact that by
orders dated April 10, 2024, June 14, 2024 and August 21, 2024, the
learned Trial Judge had itself extended the time to file a written
statement in terms of the provisions of Order VIII of the Code of Civil
Procedure, 1908.
5. Learned advocate for the appellant also contended that the
learned Trial Judge did not consider that the application under
Section 5 and 8 of the Act of 1996 was filed prior to filing of the first
statement on the substance of disputes i.e. a written statement. It was
further submitted that the learned Judge did not consider that by its
order dated March 6, 2025 the suit was taken off from the ex parte
board and thereby providing the appellant an opportunity to present
its case by filing a written statement in the suit. If that be so, by no
stretch of imagination it can be said that the appellant/defendant had
waived his right to file written statement. According to learned
advocate for the appellant, there was no embargo upon the court to
extend the period of limitation for filing a written statement if delay in
filing such written statement is explained by sufficient reasons.
4
6. In support of his contentions, learned advocate for the
appellant placed reliance upon 2023 SCC OnLine Mad 1684 (G.T.L.
Infrastructure Limited (GIL) Vs. Amaladoss) , (2011) 5 Supreme
Court Cases 532 (Booz Allen and Hamilton INC Vs. SBI Home
Finance Ltd.) , 2024 SCC OnLine SC 4082 (PIC Departmentals Pvt.
Ltd. Vs. Sreeleathers Pvt. Ltd.) , unreported decision of Karnataka
High Court in Commercial Appeal No. 457 of 2024 (M/s SJR Prime
Corporation Pvt. Ltd. & Anr. Vs. Shri P. Shubakar) and (2020) 2
Supreme Court Cases 708 (Desh Raj Vs. Balkishan) .
7. On the other hand, it was the contention of the learned
advocate for the respondent/plaintiff that the appellants filed the
application under Sections 5 and 8 of the Act of 1996 belated and
definitely after the expiry of the time period prescribed for filing of
written statement in terms of the provisions of Order VIII of Civil
Procedure Code. According to learned advocate for the respondent,
such an omission on the part of appellant/defendant amounts to
waiver of his right to file written statement.
8. Learned advocate for the respondent also submitted that the
time to present an application under Section 8 of the Act of 1996 by
the appellant cannot be extended indefinitely if the defendant failed
and neglected to submit his written statement within the specified
time schedule. It was also contended that for non-filing of the written
statement in the suit, by the appellant/defendant, the suit was fixed
5
for ex parte hearing. The suit was later taken off from ex parte board
at the behest of the appellant providing him an opportunity to file his
written statement. This, according to learned advocate for the
respondent, was a special opportunity afforded to the appellant and
cannot be construed to mean a fresh period prescribed under the
provision of Order VIII of the Code of 1908.
9. According to learned advocate of the respondent, the learned
Trial Court rightly refused to refer the disputes to arbitration and
rejected the application under Sections 5 and 8 of the Act of 1996.
10. In support of his contentions, learned advocate for the
respondent relied upon (2018) 15 Supreme Court Cases 678 (Ameet
Lalchand Shah & Ors. Vs. Rishabh Enterprises & Anr.) , 2020
SCC OnLine Del 1667 (SSIPL Lifestyle Pvt. Ltd. Vs. Vama
Apparels (India) Pvt. Ltd.) , 2024 NCKHC 51347 (Sri. Thangavelu.
R Vs. Shri Santosh. J & Ors.) , 2025 SCC OnLine Bom 1133 (State
Bank of India Vs. Surya Pharmaceuticals Ltd.) , 2025 SCC OnLine
Del 1042 (Hitachi Payments Services Pvt. Ltd. & Anr. Vs.
Shreyans Jain & Anr.) , (2005) 4 Supreme Court Cases 480
(Kailash Vs. Nankhu & Ors.) and (2011) 5 Supreme Court Cases
532 (Booz Allen and Hamilton INC Vs. SBI Home Finance Ltd.) .
11. The respondent and another Anupam Pal, the partners,
obtained a business loan of ₹ 20,40,000/- from one pre-merger agency
of the appellant on April 3, 2018. The parties entered into an
6
agreement in this regard wherein the respondents/plaintiff agreed to
repay the loan in 36 monthly instalments of ₹ 1,05,323/- each
commencing from May 2, 2018. Accordingly, a sum of ₹ 19,89,159/-
was disbursed by the appellant towards the loan after deducting the
administrative charges.
12. During the continuance of the loan agreement, the
respondent went on paying the due instalments. They however,
applied for premature foreclosure of loan account on several occasions
and asked for the terms and conditions of such foreclosure.
Thereafter, in terms of the terms and conditions of the loan agreement
dated April 3, 2018, the respondents paid a sum of ₹ 12,84,813.98/-
towards the full and final settlement of loan amount. Such payment
was duly communicated to the appellant/defendant by an email
message on January 16, 2019 seeking foreclosure of the loan account
of the respondent/plaintiff.
13. By an email message dated February 13, 2019, the
appellant/defendant communicated and annexed a foreclosure letter in
favour of the respondent/plaintiff claiming a sum of ₹ 14,38,469.39/-
towards foreclosure amount. The representation preferred by the
respondent/plaintiff against such foreclosure claim of the
appellant/defendant was not paid any heed to. Therefore, the
respondent/plaintiff brought Title Suit No. 2334 of 2023 against the
appellant/defendant seeking declaration and permanent injunction.
7
14. Although, the date of filing of the suit and date of service of
summons has not been recorded in the impugned order, nevertheless,
the learned Trial Court noted that the appellant/defendant appeared
in the suit on April 10, 2024. Therefore, the date of reckoning, for the
purposes of Order VIII of the Code of 1908 was taken as April 10,
2024. The defendant/appellant did not choose to file written
statement until March 6, 2025 i.e. 11 months after his first
appearance in the suit. The appellant/defendant came up with an
application under Sections 5 and 8 of the Arbitration and Conciliation
Act, 1996 on March 6, 2025, which according to learned Trial Court,
was much beyond the period prescribed for filing of written statement
in terms of the provisions of Order VIII Rule 1 of the Civil Procedure
Code, 1908.
15. According to learned Trial Court, filing of written statement by
a defendant is the filing of first statement of defence as contemplated
under Section 8 of the Act of 1996. The appellant/plaintiff having
failed to put in his statement of defence despite being provided with
ample opportunities, the petition under Sections 5 and 8 of the Act of
1996 was filed beyond the prescribed period which amounted to
waiver of his rights under Section 8 of Arbitration and Conciliation
Act, 1996. On such score, by the impugned order, the learned Trial
Court proceeded to reject the application under Sections 5 and 8 of
8
the Arbitration and Conciliation Act, 1996 filed on behalf of the
appellant.
16. In order to adjudicate upon the matter in controversy, it
would be apposite to consider the provisions Section 8 of Arbitration
and Conciliation Act, 1996 which reads thus,
“ 8. Power to refer parties to arbitration where there is an
arbitration agreement.—(1) A judicial authority, before which
an action is brought in a matter which is the subject of an
arbitration agreement shall, if a party to the arbitration
agreement or any person claiming through or under him, so
applies not later than the date of submitting his first
statement on the substance of the dispute, then,
notwithstanding any judgment, decree or order of the
Supreme Court or any Court, refer the parties to arbitration
unless it finds that prima facie no valid arbitration agreement
exists.
(2) The application referred to in sub-section (1) shall not be
entertained unless it is accompanied by the original
arbitration agreement or a duly certified copy thereof:
Provided that where the original arbitration agreement or a
certified copy thereof is not available with the party applying
for reference to arbitration under sub-section (1), and the said
agreement or certified copy is retained by the other party to
that agreement, then, the party so applying shall file such
application along with a copy of the arbitration agreement and
a petition praying the Court to call upon the other party to
produce the original arbitration agreement or its duly certified
copy before that Court.
(3) Notwithstanding that an application has been made under
sub-section (1) and that the issue is pending before the
9
judicial authority, an arbitration may be commenced or
continued and an arbitral award made. ”
[Emphasis supplied]
17. The dispute herein revolves around the phrase ‘not later than
the date of submitting his first statement on the substance of the
dispute’ used in Section 8 of the Act of 1996. According to the findings
arrived at in the impugned order, the appellant failed to submit his
first statement on the substance of dispute i.e. his written statement
within the time prescribed under Order VIII of the Civil Procedure
Code, 1908 which, according to learned Trial Court amounted to
waiver of the rights on the part of the appellant under Section 8 of the
Act of 1996.
18. However, according to the case made out by the
appellant/defendant, time to file written statement had though,
already elapsed but the plaintiff/appellant approached the Trial Court
and on his prayer such time was extended. It was contended that
since the time to file written statement was extended by the Trial
Court, time to exercise its rights under Section 8 of the Act of 1996
also stood extended and therefore, learned Trial Court was not
justified in refusing the prayer of the appellant to refer the disputes to
arbitration. It is evident that the application under Sections 5 and 8 of
the Act of 1996 was filed by the appellant after about 11 months of his
first appearance in the suit.
10
19. In accordance with the provisions of Order VIII Rule 1 of the
Civil Procedure Code, 1908, a written statement is required to be filed
within 30 days which is extendable up to 90 days. It is also
established law that the provision that the time to file written
statement may be extended till 90 days is directory in nature. The
Courts may, in exceptional circumstances, allow such extension even
beyond the stipulated 90 days but in order to avail such extension, the
defendant is obliged to establish strong and sufficient cause.
Apparently, by the impugned order, the learned Trial Court not only
rejected the application under Section 8 of the Act of 1996 filed on
behalf of the appellant but at the same time struck off his defence in
view of non-filing of written statement within the prescribed time
period.
20. In GTL Infrastructure Limited (supra), the application
under Section 8 of the Arbitration and Conciliation Act was filed by
the defendant along with the written statement. The Madras High
Court noted in the judgment that,
“26. Therefore, it is clear that once an application under
Section 8 of the Arbitration and Conciliation Act is filed, the
civil Court should first see that whether there is ouster of
jurisdiction in terms special statute namely the Arbitration
and Conciliation Act 1996. In the present case, the trial Court
has proceeded to hold that Section 8 application under
Arbitration and Conciliation Act has been filed belatedly
relying upon the Judgment of the Hon'ble Supreme Court
11
reported in (2019) 12 SCC 210 (SCG Contracts (India) Private
Limited v. K.S. Chamankar Infrastructure Private Limited)
which arises out of a commercial suit. Further, the trial Court
has erroneously interpreted Section 8 of the Arbitration Act to
hold that Section 8 application cannot be filed along with the
written statement. The existence of the sale agreement and
arbitration clause in the said agreement are admitted by both
the parties. Therefore, this Court ought to have referred the
matter to the Arbitration without relying upon the delay on the
part of the defendant in filing an application under Section 8
of the Arbitration Act. Once the existence of a valid arbitration
agreement is brought to the notice of the Court, the Court has
no discretion whatsoever except to refer the matter for
Arbitration.
27. In the present case, no extraordinary circumstances have
been pointed out by the Civil Court to exercise its jurisdiction
ignoring the arbitration clause.
28. In view of the above said deliberations, the order
impugned in the revision petition is set aside. This Civil
Revision Petition is allowed. It is declared that the civil Court
has no jurisdiction to entertain O.S. No. 252 of 2021 and the
parties are at liberty to pursue their remedy under Arbitration
and Conciliation Act 1996. No costs. Consequently, connected
miscellaneous petition is closed.”
21. However, in Booz Allen and Hamilton INC (supra) it was
observed that filing of first statement of defence is linked to
unambiguous intention of the defendant to submit to the jurisdiction
of the Court. Mere filing of other pleadings like written objection to an
application for injunction or ancillary proceedings cannot be
12
construed to the statement of defence on the part of the defendant.
The Hon’ble Court thus held that,
interim relief
“30. When the plaintiffs file applications for
like appointment of a Receiver or grant of a temporary
injunction, the defendants have to contest the application.
Such contest may even lead to appeals and revisions where
there may be even stay of further proceedings in the suit. If
supplemental proceedings like applications for temporary
injunction on appointment of Receiver, have been pending for
a considerable time and a defendant has been contesting
such supplemental proceedings, it cannot be said that the
defendant has lost the right to seek reference to arbitration. At
the relevant time, the unamended Rule 1 of Order 8 of the
Code was governing the filing of written statements and the
said rule did not prescribe any time-limit for filing written
statement. In such a situation, mere passage of time between
the date of entering appearance and date of filing the
application under Section 8 of the Act, cannot lead to an
inference that a defendant had subjected himself to the
jurisdiction of the court for adjudication of the main dispute.
31. The facts in this case show that the plaintiff in the suit
had filed an application for temporary injunction and
appointment of Receiver and that was pending for some time.
Thereafter, talks were in progress for arriving at a settlement
out of court. When such talks failed, the appellant filed an
application under Section 8 of the Act before filing the written
statement or filing any other statement which could be
considered to be a submission of a statement on the
substance of the dispute. The High Court was not therefore
justified in rejecting the application on the ground of delay.”
13
22. In the case at hand, nothing has been placed before us that
the suit filed by the respondent involved any supplemental proceeding
causing delay in filing the written statement within the prescribed
time. The appellant/defendant simply did not appear in the suit and
took almost 11 months in filing the application under Section 8 of the
Act of 1996 without filing his written statement. On such score, the
defence of appellant/defendant was ordered to be struck off by the
Trial Court.
23. Furthermore, in Booz Allen and Hamilton INC (supra), the
Hon’ble Supreme Court also held that the suit in the said case,
involved disputes with regard to mortgage which could not be decided
by arbitration and upheld the rejection of application under Section 8.
It was noted that,
“51. If the three issues referred by the appellant are the only
disputes, it may be possible to refer them to arbitration. But a
mortgage suit is not only about determination of the existence
of the mortgage or determination of the amount due. It is about
enforcement of the mortgage with reference to an immovable
property and adjudicating upon the rights and obligations of
several classes of persons (referred to in para 48.2 above),
who have the right to participate in the proceedings relating to
the enforcement of the mortgage, vis-à-vis the mortgagor and
mortgagee. Even if some of the issues or questions in a
mortgage suit (as pointed out by the appellant) are arbitrable
or could be decided by a private forum, the issues in a
mortgage suit cannot be divided. 53. Having regard to our
finding on Question (iv) it has to be held that the suit being
14
one for enforcement of a mortgage by sale, it should be tried
by the court and not by an Arbitral Tribunal. Therefore we
uphold the dismissal of the application under Section 8 of the
Act, though for different reasons.”
24. The suit involved in the present appeal involves similar issues
as that in Booz Allen and Hamilton INC (supra). The disputes
involved in such suit relates to a loan agreement between the
appellant and the respondent.
25. In PIC Departmentals (P) Ltd. (supra), the Hon’ble Supreme
Court upheld the discretion exercised by learned Court in favour of
the defendant in view of the fact that the defendant failed to submit
his written statement in the suit owing to an erroneous reporting in
the official website of the High Court which put the defendant under
an impression that the suit was disposed of. At the same time, the
Hon’ble Supreme Court laid down that,
“ 15. Learned senior counsel for the appellant is correct that
the power to extend time for filing Written Statement should
not be employed as a matter of course, but with great caution
so that the purpose of the procedural statute is not defeated
and unscrupulous litigants do not abuse the process of the
Court by adopting dilatory tactics. However, the same cannot
be examined in a strait-jacket/sealed compartment for the
peculiar facts and circumstances of every case have to be
carefully and individually appreciated. Thereafter, the Court
concerned has to take a call as to whether the request made
is genuine or, more importantly, whether refusal to accede to
such request may lead to an eventual miscarriage of justice. It
15
must not be lost sight of that ultimately, procedural
technicalities have to give way to substantive justice.
Procedure, well and truly, is only the handmaiden of justice.7
The discretion granted to Courts has to be exercised on a
case-specific basis. Undisputedly, ‘procedural laws are
primarily intended to achieve the ends of justice and,
normally, not to shut the doors of justice for the parties at the
very threshold.
16. In the present instance, we find that the sequence of
events clearly indicates that the, respondent cannot be said to
be solely at fault for as it was under the impression that the
suit already stood disposed of and thus, there was no
requirement/occasion to file the Written Statement.
Admittedly, the case was listed suddenly after a prolonged
gap on 17.01.2017, whereafter that the respondent filed an
appropriate application. Moreover, the reports dated
25.01.2017 and 11.05.2023 submitted by the Registry of the
High Court indicate that (a) the official website of the High
Court did indeed state that the suit had been disposed of on
01.03.2000, and; (b) the High Court could not, for reasons
best known to it alone, trace out any orders in the file of the
suit pre-17.01.2017. Stricto sensu, the situation that prevailed
is a direct result of the confusion created by the Registry of the
High Court. In this view, it would be improper to not permit the
taking on record of the Written Statement of the respondent
apropos the suit.
17. We, thus, find that discretion has rightly been exercised
by the Division Bench of the High Court in favour of the
respondent. We are in agreement with the reasons assigned
by the Division Bench for setting aside the learned Single
Judge's order dated 12.06.2023.18. ”
16
26. In M/s SJR Prime Corporation Pvt. Ltd. (supra) prescribed
time to file written statement was already elapsed. The defendant’s
application under Order IX Rule 7 was allowed which was never
challenged. Time to file written statement was extended several times.
Ultimately, on the expiry of last extension, the defendant came up with
an application under Section 8 of Arbitration and Conciliation Act,
1996 which was disallowed on the ground that time for filing written
statement had already expired. The Karnataka High Court set aside
such order of rejection of application under Section 8 as the same was
found by the said High Court to have been filed within the extended
period for filing written statement more specifically on the last day.
27. Desh Raj (supra) lays down the considerations to be looked
into while considering a prayer for extension of time to file written
statement. The Hon’ble Supreme Court observed thus,
“14. Let us, therefore, consider whether the appellant has
made out a case of exercising such discretionary jurisdiction?
The present civil suit had been filed by the respondent for a
decree of specific performance of an agreement to sell one floor
of an ancestral property located in Devli Village, Delhi and
permanent injunction against alienation of the same by the
petitioner to third parties. The counsel for the respondent has
not contested the non-commercial nature of the dispute, and
even independently we are satisfied that the dispute does not
fall within the parameters specified under Section 2(c) of the
Commercial Courts Act, 2015 and in particular sub-clause
(vii), as the immovable property here is not of a nature which
is “used exclusively in trade or commerce”. Hence, the
17
appellant is correct in contending that the High Court
overlooked the nature of the dispute and mistakenly applied
the ratio of a case rendered in light of a modified version of
the Code of Civil Procedure, which would only be applicable to
commercial disputes.
15. However, it would be gainsaid that although the
unamended Order 8 Rule 1 CPC is directory, it cannot be
interpreted to bestow a free hand to on any litigant or lawyer
to file written statement at their own sweet will and/or to
prolong the lis. The legislative objective behind prescription of
timelines under CPC must be given due weightage so that the
disputes are resolved in a time-bound manner. Inherent
discretion of courts, like the ability to condone delays under
Order 8 Rule 1 is a fairly defined concept and its contours
have been shaped through judicial decisions over the ages.
Illustratively, extreme hardship or delays occurring due to
factors beyond control of parties despite proactive diligence,
may be just and equitable instances for condonation of delay.
16. However, it is clear from the facts on record that numerous
opportunities had been accorded to the appellant. He was
served on 1-5-2017 and entered appearance through the
counsel on 15-5-2017. As per Order 8 Rule 1 CPC, the
appellant ideally ought to have filed his written statement by
31-5-2017 and at the very latest by 30-7-2017. In addition to
two separate deadlines for filing of the written statement
within the 90-day time-frame prescribed by the “original”
Order 8 Rule 1, the civil court even post expiry of the 90-day
period again gave one last and final opportunity on 18-9-2017
subject to payment of costs of Rs 3000. None of these
deadlines were complied with. Even on 11-10-2017, when the
court finally closed the appellant's ability to file written
statement and struck off his defence from the record, no
attempt was made to comply with the process of law.”
18
28. Ameet Lalchand Shah (supra) noted the amendments in
Section 8 of Arbitration and Conciliation Act, 1996 to the effect that (i)
the relevant “party” that is entitled to apply seeking reference to
arbitration has been clarified/amplified to include persons claiming
“through or under” such a party to the arbitration agreement; (ii)
scope of examination by the judicial authority is restricted to a finding
whether “no valid arbitration agreement exists” and the nature of
examination by the judicial authority is clarified to be on a “prima
facie” basis; (iii) the cut-off date by which an application under Section
8 is to be presented has been defined to mean “the date of” submitting
the first statement on the substance of the dispute; and (iv) the
amendments are expressed to apply notwithstanding any prior judicial
precedent.
29. However, in the said authority, the Hon’ble Supreme Court
considered the arbitrability of disputes with reference to fraud pleaded
on the part of the parties. Therefore, the ratio laid down in Ameet
Lalchand Shah (supra) is not attracted in the facts and
circumstances of the present case.
30. In SSIPL Lifestyle Pvt. Ltd. (supra) noted the facts of the
case that Summons were issued in the suit on 15th March, 2018 and
on 16th May, 2018, time was given for filing of the written statement.
On 17th May, 2018, insolvency proceedings were commenced against
19
Defendant No. 1 before the NCLT which were finally closed on 8th
October, 2018. The said High Court held thus,
“22. Thus, as per the above decision, in view of the amended
language in Section 8, the limitation for filing of the written
statement under CPC for non-commercial suits and under the
Commercial Courts Act for commercial suits would be
applicable for filing of an application under Section 8. In view
thereof, the Court concluded that the maximum period would
be 90 days for ordinary civil suits and 120 days for
commercial suits.”
31. In the instant case, the application under Section 8 of the Act
of 1996 appears to have been filed after about 11 months of the first
appearance of the appellant/defendant in the suit which is much after
the time prescribed under Order VIII Rule 1 of the Civil Procedure
Code. The impugned order also demonstrates that the conduct of the
appellant in pursuing the suit was such that the learned Trial Court
chose to strike off the defence of the appellant for non-submission of
written statement.
32. The Karnataka High Court in Sri Thangavely. R (supra) in
connection with a suit involving commercial dispute noted various
authorities like Booz Allen and Hamilton Corporation (supra),
G.T.L. Lifestyle Limited (supra), SSIPL Lifestyle Pvt. Ltd. (supra)
20
and many other authorities. It also noted findings of the learned Trial
Judge in the facts of such case to the effect that,
“in spite of service of summons, defendant No. 2 had failed to
appear before court to contest the suit. Furthermore, since the
respondent-defendant had failed to contest the suit, the case
was posted for commencement of recording plaintiff’s evidence
on 07.04.2018. The suit however, was restored wide order
dated 20.02.2019 and the respondent-defendant No. 2
despite being granted an extension of time to file the written
statement, had instead preferred a reference application
under section 8 of the Arbitration and Conciliation Act, 1996
on 20.03.2019. A contextual interpretation of the statutory
scheme of the Act of 1996, and the prescription of the outer
limit of 120 days to file the written statement as contained in
Order 8 Rule one of CPC, 1908, and the ratio laid down by the
apex court in Booz Allen ((2011) 5 SCC 532), leads us to
reasonably conclude that a reference application under
section 8 of the Act, 1996 should have been filed within a
period of 120 days from the date of service of summons to the
defendant, which was long past before 20.03.2019.”
33. Taking note of the aforesaid facts and circumstances of the
case as well as the ratio laid down in the aforementioned authorities,
the Karnataka High Court held that where the reference application
under Section 8 of the Arbitration and Conciliation Act, 1996 was
made long after the expiry of the outer limit of 120 days from the date
of service of summons, such a reference could not be construed to
have been made at the earliest. On such findings, the Karnataka High
21
Court proceeded to allow the civil revision, setting aside the order
allowing the application under Section 8 of the Act of 1996.
34. Similar views were expressed by the Bombay High Court in
State Bank of India (supra). It also noted the authorities in SSIPL
Lifestyle Pvt. Ltd. (supra) and Booz Allen and Hamilton
Corporation (supra). In the facts of said case, which also was in
respect of commercial suit, the Bombay High Court held that,
“ 12. The Delhi High Court in the case of SSIPL Lifestyle Private
Limited v. Vama Apparels (India) Private Limited (supra) has
interpreted the words “the date of” to mean the date of filing the
written statement in the Suit and held that the same should be
considered as the limitation period for filing an Application under
Section 8 of the said Act.
13. In the said decision it has been held that if the statement of
defence is filed by the party that would constitute a waiver of the
arbitration clause and that the first statement on the substance of
the dispute is the written statement. I agree. That when the time
for filing the written statement has expired would also constitute
a waiver and that if there was undue delay in filing the
application, mandate of filing the reference application at the
earliest, the arbitration clause could be deemed waived.
14. ………………………….
15. …………………………..
16. In the facts of the case, the Suit has been filed on 23rd
September, 2015. Writ of summons along with the Plaint has
been served upon the Defendant on 27th October, 2016. Since
this is a commercial Suit, the limitation period of 120 days would
be applicable. The 120 days' period has expired on 24th
February, 2017. Accordingly, the date of submitting the written
22
statement has expired on 24th February, 2017. The interim
Application for setting aside the no written statement order
statedly has been filed on 8th October, 2024, which is also way
beyond the period of 120 days and therefore the arbitration
clause in view of Booz Allen & Hamilton Inc. v. SBI Home Finance
Ltd.3, deemed waived. Therefore, by no stretch of imagination it
can be said that this application for reference to arbitration under
Section 8 of the said Act is not later than the date of submitting
the first statement by the Defendant.
17. In view of the aforesaid discussion, this Application under
Section 8 of the said Act as far as prayer Clause (a) is concerned,
being time barred deserves to be dismissed and is hereby
dismissed, with liberty to the Applicant to take out appropriate
application(s) with respect to the other prayers.”
35. In Hitachi Payments Services Pvt. Ltd. & Anr. (supra), the
Delhi High Court in the facts of the said case that the Appellants had
been duly served with the summons of the suit on 20.07.2023, and
being a commercial suit of a specified value, the maximum period for
filing the written statement including the period by which the delay in
filing the same can be condoned, being 120 days of the receipt of the
summons, had expired on 18.11.2023. The right of the Appellants to
file the defence was consequently struck off by the learned Trial Court
vide Order dated 22.12.2023, dismissed the appeal and held that, the
application filed by the Appellants itself was not maintainable, the
period for filing of the written statement having expired and, in fact,
23
the defence of the Appellants having been struck of by the learned
Trial Court vide the Order dated 22.12.2023.
36. Kailash (supra) was rendered in respect of an election
petition and laid down that the provisions contained in Order VIII,
Rule 1 of the Civil Procedure Code were directory in nature. The
Hon’ble Supreme Court laid down the following principles, that’s to
say:
“ 42. Ordinarily, the time schedule prescribed by Order 8 Rule
1 has to be honoured. The defendant should be vigilant. No
sooner the writ of summons is served on him he should take
steps for drafting his defence and filing the written statement
on the appointed date of hearing without waiting for the
arrival of the date appointed in the summons for his
appearance in the court. The extension of time sought for by
the defendant from the court whether within 30 days or 90
days, as the case may be, should not be granted just as a
matter of routine and merely for the asking, more so, when the
period of 90 days has expired. The extension can be only by
way of an exception and for reasons assigned by the
defendant and also recorded in writing by the court to its
satisfaction. It must be spelled out that a departure from the
time schedule prescribed by Order 8 Rule 1 of the Code was
being allowed to be made because the circumstances were
exceptional, occasioned by reasons beyond the control of the
defendant and such extension was required in the interest of
justice, and grave injustice would be occasioned if the time
was not extended.
43. A prayer seeking time beyond 90 days for filing the
written statement ought to be made in writing. In its judicial
discretion exercised on well-settled parameters, the court may
24
indeed put the defendants on terms including imposition of
compensatory costs and may also insist on an affidavit,
medical certificate or other documentary evidence (depending
on the facts and circumstances of a given case) being annexed
with the application seeking extension of time so as to
convince the court that the prayer was founded on grounds
which do exist.
44. The extension of time shall be only by way of exception
and for reasons to be recorded in writing, howsoever brief
they may be, by the court. In no case, shall the defendant be
permitted to seek extension of time when the court is satisfied
that it is a case of laxity or gross negligence on the part of the
defendant or his counsel. The court may impose costs for dual
purpose: (i) to deter the defendant from seeking any extension
of time just for the asking, and (ii) to compensate the plaintiff
for the delay and inconvenience caused to him.
45. However, no straitjacket formula can be laid down except
that the observance of time schedule contemplated by Order 8
Rule 1 shall be the rule and departure therefrom an exception,
made for satisfactory reasons only. We hold that Order 8 Rule
1, though couched in mandatory form, is directory being a
provision in the domain of processual law.”
37. In the case at hand, as noted above, the appellant/defendant
came up with an application under Section 8 of the Arbitration and
Conciliation Act, 1996 after about 11 months of its first appearance in
the suit which came to be rejected by the learned Trial Court on the
ground that the same was filed much after the expiry of the time
prescribed for putting in the statement of defence. The appellant
25
sought several extensions of time to file its written statement and
instead of filing written statement, came up with an application under
Section 8 of the Act of 1996.
38. Therefore, in view of the discussions made hereinabove, we
find no reason to interfere with the impugned order. The same is
hereby affirmed. Accordingly, the instant appeal being FMA 1389 of
2025 is hereby dismissed. Connected applications, if any, shall also
stand disposed of.
39. Urgent photostat certified copy of this judgment, if applied
for, be supplied to the parties on priority basis upon compliance of all
formalities.
[MD. SHABBAR RASHIDI, J.]
40. I agree.
[DEBANGSU BASAK, J.]