Karnataka HC Gives IOCL Fresh Chance To Contest Landowner’s ₹81.76 Lakh Occupation-Damages Claim After Cross-Examination Was Denied Without a Written Statement

The plaintiff sought damages for continued occupation of land leased to Indian Oil Corporation Limited (defendant No. 1), alleging that the 25-year lease had expired in February 2019.

The Commercial Court decreed the suit against defendant No. 1 for Rs.81,76,000 with interest at 18% per annum from the date of suit.

Defendant No. 1 had not filed a written statement.

On 23 July 2025, the Commercial Court recorded the plaintiff’s evidence, marked documents, treated cross-examination as “nil” because defendant No. 1 and its counsel were absent, heard arguments, and reserved judgment.

Defendant No. 1 appealed, contending that it had been denied an opportunity to cross-examine the plaintiff.

Section 13 of the Commercial Courts Act, 2015 provides for an appeal from specified decisions of Commercial Courts.

The proviso to Order VIII Rule 1 CPC, as amended for commercial disputes, imposes a 120-day limit for filing a written statement, after which the defendant forfeits the right to file it.

However, the Supreme Court in Ranjit Singh v. State of Uttarakhand, 2024 INSC 724, recognised that a defendant may cross-examine the plaintiff’s witnesses to challenge the plaintiff’s case, including by raising legal bars apparent from the pleadings or evidence.

The Court also relied on M/s Anvita Auto Tech Works Pvt. Ltd. v. M/s Aroush Motors, 2025 SCC OnLine SC 2181, which, in the circumstances of that case, permitted the defendant to file a written statement subject to costs and to cross-examine the plaintiff’s witnesses.

The Commercial Court treated the absence of a written statement as a reason to deny cross-examination and, on the same day, closed the plaintiff’s evidence and heard arguments, without affording defendant No. 1 an adequate opportunity to test PW.1’s evidence.

The High Court held that failure to file a written statement does not, by itself, extinguish the defendant’s right to cross-examine the plaintiff’s witnesses.

By proceeding otherwise, the Commercial Court acted contrary to the principles identified in Ranjit Singh and Anvita Auto Tech Works and violated natural justice.

It allowed the appeal, set aside the judgment and decree, and restored Commercial O.S. No. 6 of 2022.

Defendant No. 1 was permitted to file a written statement within 30 days of appearing before the Commercial Court, subject to payment of Rs.1,00,000 to the District Legal Services Authority, Kalaburagi District.

The parties were directed to appear before the Commercial Court on 16 November 2026; the Court left all merits contentions open.