The Delhi High Court has ruled that the processes of Commercial Courts cannot be dealt with in a casual manner to convert them into general civil suits. Justice Girish Kathpalia dismissed a petition challenging a Commercial Court’s order that took a defendant’s Written Statement off the record due to the non-payment of imposed costs.
Case Background
The petition, M/s Om Fire Safety Company Pvt Ltd Vs Umakant (CM(M) 2252/2025), was filed challenging the order dated October 17, 2025, passed by the learned Commercial Court.
The Petitioner/Defendant had failed to file their Written Statement within the prescribed time in the underlying commercial suit. However, via an order dated August 7, 2025, the Commercial Court allowed the application under Order VIII Rule 1 of the Code of Civil Procedure (CPC), condoning the delay subject to the payment of a cost.
The Court noted that on subsequent dates, specifically September 1, 2025, and October 17, 2025, the cost remained unpaid. On October 17, when the counsel for the Respondent/Plaintiff raised the issue of non-payment, the counsel for the Petitioner expressed unawareness and was offered another passover, but, as noted by the Court, “she stated in a casual manner ‘de denge'” (would pay). Consequently, the Commercial Court took the Written Statement off the record.
Arguments
The counsel for the Petitioner/Defendant contended that the non-payment stemmed from confusion regarding to whom the cost was payable, as the order dated August 7, 2025, was silent on this specific detail.
Upon a specific query by the High Court regarding the defense sought to be raised, the counsel submitted that the goods supplied were defective.
Court’s Analysis and Observations
Justice Girish Kathpalia rejected the Petitioner’s explanation regarding the confusion on payment. The Court observed that even if the order was silent, “it is clear that the cost has to be paid to the opposite side which has suffered adjournment.” The Court termed the excuse “completely flimsy.”
Strict Adherence to Commercial Courts Act
The High Court emphasized the legislative intent behind the Commercial Courts Act. Justice Kathpalia observed:
“The Commercial Courts Act was enacted with a specific aim of expediting the commercial disputes. Any interpretation of any legal provision that dilutes the provision would militate against the basic philosophy behind creation of commercial courts. The commercial courts and the processes adopted by the same cannot be allowed to be dealt with in such casual manner, so as to convert the same into general civil suit.”
The Court further stated that where a litigant fails to strictly adhere to timelines and continues to protract proceedings despite judicial indulgence, “no further indulgence can be extended.”
Legal Precedents
The Court referred to the Supreme Court judgment in Manohar Singh vs D.S. Sharma, (2010) 1 SCC 53. Relying on this precedent regarding Section 35B of the CPC, the Court reiterated that “as a consequence of non-payment of cost, the defaulting party has to be prohibited from participating in further proceedings.”
Regarding the Petitioner’s defense of defective goods, the Court noted that “admittedly, prior to filing of the Written Statement, no notice in this regard was ever issued to the respondent/plaintiff.”
Decision
Finding no infirmity or perversity in the impugned order that would warrant intervention under Article 227 of the Constitution of India, the Delhi High Court dismissed the petition and the accompanying applications. The order of the Commercial Court stands upheld.
