Order 14

Order Details: COPY OF ORDER
Pdf Text: IN THE COURT OF SH. M. K. NAGPAL,
DISTRICT JUDGE (COMMERCIAL COURT)-13,
CENTRAL DISTRICT, TIS HAZARI COURTS,
DELHI
CS (COMM.) NO. 1344/2023
IN THE MATTER OF:
M/s. Staple & Packaging Solutions
…….Plaintiff
Vs.
M/s. Daiwik International
…....Defendant
ORDER ON APPLICATION UNDER ORDER 7 RULE
11 READ WITH SECTION 151 CPC OF THE
DEFENDANT
O R D E R
10.05.2024
1. By this order, I shall dispose of an application under Order
7 Rule 11 r/w Section 151 CPC dated 16.01.2024 filed on behalf
of defendant seeking rejection of plaint of the present suit.
2. The contents of application as well as of the reply thereto
dated 08.02.2024 filed on behalf of the plaintiff have been
perused and arguments advanced on the application by Ms.
Namita D. Tomar, Ld. Counsel for defendant, assisted by Sh.
Ajay Vashisht and Sh. Akhilesh Advocates, and Ms. Seema
Mishra, Ld. Counsel for plaintiff have been heard and
considered. Case record including the written submissions filed
on behalf of defendant today have also been perused.
CS(Comm) No. 1344/2023 Page no. 1 of 11
-- 1 of 11 --
3. Facts of the case, as far as the same are necessary for
disposal of present application, are that this suit for recovery of
Rs. 4,54,417/-, along with interest, has been filed by plaintiff
towards the price of goods supplied by him to the defendant. It is
the case of plaintiff that he was maintaining a running account
with regard to the goods supplied to defendant and as per his
account ledger book, a sum of Rs. 4,54,417/- is outstanding from
the defendant. It is averred that on 24.08.2019, when the plaintiff
requested the defendant to pay the above said amount, the
defendant assured to pay it within two days and then on
26.08.2019, the defendant had given a further order of goods
valuing Rs. 2 lakhs to him and had also simultaneously issued a
cheque for Rs. 6,54,417/- of even date towards the above
outstanding amount as well as the cost of goods freshly ordered
by him. It is the case of plaintiff that the said cheque got
dishonoured vide return memo dated 25.09.2019 due to
“insufficient funds” in account of the defendant and since the
defendant had failed to pay the outstanding amount of Rs.
4,54,417 i.e. (Rs. 6,54,417/- - Rs. 2,00,000/-) despite his repeated
requests and demands, the plaintiff is entitled to recover the
aforesaid amount from him, along with pendent-lite and future
interest.
4. The defendant appeared before this court on receipt of
summons and is contesting the suit on merits and one preliminary
objection was also taken by him in his written statement to the
effect that the suit of plaintiff is barred by limitation as the
CS(Comm) No. 1344/2023 Page no. 2 of 11
-- 2 of 11 --
prescribed period of three years began on 26.09.2019 and it
expired on 25.09.2022. It is necessary to mention here that the
present suit has been filed by plaintiff on 10.10.2023 with an
averment that in view of the judgment/order dated 10.01.2022 of
the Hon’ble Supreme Court in case Re: Cognizance for
Extension of Limitation, bearing Suo Motu Writ Petition No.
3 of 2020, the period from 15.03.2020 till 28.02.2022 is required
to be excluded for the purposes of calculating the period of
limitation for filing of the present suit.
5. It has been observed from record that on basis of pleadings
of the parties, issues were also earlier framed by this court on
05.12.2023 and the first issue framed by court was on the point
of limitation itself and the bar created thereby to filing of the
present suit. However, when two witnesses of the plaintiff stood
also subsequently examined on record, the defendant came up
with the present application under Order 7 Rule 11 CPC seeking
rejection of the plaint of present suit on the aforesaid ground.
6. It is the contention of Ld. Counsel for defendant that the
above order of Hon’ble Supreme Court in case Re: Cognizance
for Extension of Limitation (Supra) being relied upon by the Ld.
Counsel for plaintiff is not of any help to the plaintiff as period of
limitation in the present suit began prior to the period of two
years from 15.03.2020 till 28.02.2022, which has been directed
to be excluded by the Hon’ble Supreme Court for the purposes of
limitation, and it also expired much beyond the above said
period. Hence, it is her submission that the above relaxation
CS(Comm) No. 1344/2023 Page no. 3 of 11
-- 3 of 11 --
provided by the Hon’ble Supreme Court about extension of the
period of limitation is not available to the plaintiff and the
present suit is hopelessly time barred and the plaint is, therefore,
liable to be rejected on this account. She has also referred to and
relied upon an order dated 04.07.2023 passed by the Ld. District
Judge (Comm) Court-02, West/THC Extn. Block in case titled as
Dial Logistics Pvt. Ltd. Vs. Mahalaxmi Cargo Carrier in
support of her above contentions.
7. For testing the merits of above contention being raised by
Ld. Counsel for the defendant, it is first necessary to reproduce
herein the relevant extracts of above Full Court order of the
Hon’ble Supreme Court in case Re: Cognizance for Extension
of Limitation (Supra) and the same are as under :-
“1. In March, 2020, this Court took Suo Motu cognizance of the
difficulties that might be faced by the litigants in filing
petitions/applications/ suits/appeals/all other quasi proceedings
within the period of limitation prescribed under the general law of
limitation or under any special laws (both Central and/or State) due
to the outbreak of the COVID-19 pandemic.
2. On 23.03.2020, this Court directed extension of the period of
limitation in all proceedings before Courts/Tribunals including this
Court w.e.f. 15.03.2020 till further orders. On 08.03.2021,the order
dated 23.03.2020 was brought to an end, permitting the relaxation of
period of limitation between 15.03.2020 and14.03.2021. While
doing so, it was made clear that the period of limitation would start
from 15.03.2021.
3. Thereafter, due to a second surge in COVID-19 cases, the
Supreme Court Advocates on Record Association (SCAORA)
intervened in the Suo Motu proceedings by filing Miscellaneous
Application No. 665 of 2021 seeking restoration of the order dated
23.03.2020 relaxing limitation. The aforesaid Miscellaneous
Application No. 665 of 2021 was disposed of by this Court vide
Order dated 23.09.2021, wherein this Court extended the period of
limitation in all proceedings before the Courts/Tribunals including
this Court w.e.f 15.03.2020 till 02.10.2021.
CS(Comm) No. 1344/2023 Page no. 4 of 11
-- 4 of 11 --
4. ………
5. Taking into consideration the arguments advanced by learned
counsel and the impact of the surge of the virus on public health and
adversities faced by litigants in the prevailing conditions, we deem it
appropriate to dispose of the M.A. No. 21 of 2022 with the following
directions:
I. The order dated 23.03.2020 is restored and in continuation
of the subsequent orders dated 08.03.2021, 27.04.2021and
23.09.2021, it is directed that the period from15.03.2020 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 quasi-judicial 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 90days
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.
IV. It is further clarified that the period from 15.03.2020 till
28.02.2022 shall also stand excluded in computing the periods
prescribed under Sections 23 (4) and 29A of the Arbitration
and Conciliation Act, 1996, Section 12A of the Commercial
Courts Act, 2015 and provisos (b) and (c) of Section 138 of
the Negotiable Instruments Act, 1881 and any other laws,
which prescribe period(s) of limitation for instituting
proceedings, outer limits (within which the court or tribunal
can condone delay) and termination of proceedings.”
(Emphasis supplied)
8. Going by the submissions made by defendant in the
present application, the period of limitation in present case is
being stated to have begun on 26.09.2019 and it was to expire on
25.09.2022. However, in terms of above guidelines laid down by
the Hon’ble Supreme Court, the entire period of two years from
CS(Comm) No. 1344/2023 Page no. 5 of 11
-- 5 of 11 --
15.03.2020 to 28.02.2022 is required to be excluded for
calculating the period of limitation of the present case and the
balance period of limitation as was available to the plaintiff on
15.03.2020 will become available to him on 01.03.2022. The
contention of Ld. Counsel for defendant that the benefit of above
period of two years is not available to the plaintiff herein as the
limitation in this case began to run much prior to 15.03.2020, i.e.
on 26.09.2019, and it expired much after the date 28.02.2022,
i.e. on 25.09.2022, is not tenable as it is apparently against the
clear and true import of the above guidelines and if this
contention is accepted, it will frustrate the very purpose of
issuance of the said guidelines. The Hon’ble Supreme Court has
clearly laid down through the said guidelines that the period of
limitation which has already started to run prior to 15.03.2020
will stop running on the above date and it would start running
again on 01.03.2022 only and it means that the same will remain
suspended during the intervening period between 15.03.2020 to
28.02.2022.
9. The above guidelines laid down by the Hon’ble Supreme
Court in case of Re: Cognizance for Extension of Limitation
(Supra) were even followed by the Hon’ble High Court in the
case of Captain Sudhanshu Bharadwaj Vs. Air India Limited,
MANU/DE/8601/2023 and in this case the operational effect of
the said guidelines came to be considered and explained by the
Hon’ble High Court and the relevant extracts thereof are as
under:-
CS(Comm) No. 1344/2023 Page no. 6 of 11
-- 6 of 11 --
‘10. The said order clearly directs that the period from
15.03.2020 till 28.02.2022 shall stand 'excluded' for the
purposes of limitation. The Supreme Court in Prakash
Corporates (supra) has held that the effect of this stipulation is
that exclusion of the said period, a necessary consequence,
results in corresponding enlargement of time, over and above the
period prescribed. The relevant extract of the judgment is as
under :-
"28... A look at the scheme of the Limitation Act, 1963
makes it clear that while extension of prescribed period in
relation to an appeal or certain applications has been
envisaged under Section 5, the exclusion of time has been
provided in the provisions like Sections 12 to 15 thereof.
When a particular period is to be excluded in relation to
any suit or proceeding, essentially the reason is that such a
period is accepted by law to be the one not referable to any
indolence on the part of the litigant, but being relatable to
either the force of circumstances or other requirements of
law (like that of mandatory two months' notice for a suit
against the Government). The excluded period, as a
necessary consequence, results in enlargement of time,
over and above the period prescribed."
11. It was further held that legal effect and coverage of the
orders passed by the Supreme Court, extending the period of
limitation, cannot be unnecessarily narrowed and rather, having
regard to their purpose and object, full effect is required to be
given to such orders and directions. The relevant extract of the
judgment is as under :-
"27.7. We are not elaborating on other directions issued
by this Court but, when read as a whole, it is but clear that
the anxiety of this Court had been to obviate the hardships
likely to be suffered by the litigants during the onslaughts
of this pandemic. Hence, the legal effect and coverage of
the orders passed by this Court in SMWP No. 3 of 2020
cannot be unnecessarily narrowed and rather, having
regard to their purpose and object, full effect is required
to be given to such orders and directions."
12. Thus, the entire period from 15.03.2020 to 28.02.2022 is
required to be excluded in computing the period of limitation. It
follows that the period of limitation would stop running on
15.03.2020 and would start running again on 01.03.2022.
Consequently, the balance period of limitation remaining as on
03.10.2021 as contemplated in para 5 (II) would be the same as
balance period of limitation remaining as on 15.03.2020.
CS(Comm) No. 1344/2023 Page no. 7 of 11
-- 7 of 11 --
13. It is incongruous to suggest that while the period from
03.10.2021 to 28.02.2022 is to be excluded for the purpose of
calculating period of limitation, the same is not to be done for
the period from 15.03.2020 to 02.10.2021. Doing so would be
inconsistent with the plain language of para 5 (I) of the order
dated 10.01.2022.
14. The order dated 10.01.2022 cannot be construed to reach the
conclusion that limitation continues to run till 04.10.2021 but
will stop running during the period 03.10.2021 till 28.03.2022.
This would be contrary not only to the purport of the order dated
10.01.2022 but also to the expressed language of para 5 (I) of
the said order dated 10.01.2022.”
(Emphasis supplied)
10. It is also relevant to mention herein another recent
judgment of the Hon’ble Supreme Court in case of M/S Arif
Azim Co. Ltd. Vs. M/S Aptech Ltd., 2024 SCC OnLine SC
2015, wherein the above guidelines again came to be reiterated
in following words:-
‘82. Thus, in ordinary circumstances, the limitation period
available to the petitioner for raising a claim would have come to
an end after an expiry of three years, that is, on 27.03.2021.
However, in March 2020, the entire world was taken under the
grip of the deadly Covid-19 pandemic bringing everyday life and
commercial activity to a complete halt across the globe. Taking
cognisance of this unfortunate turn of events, this Court vide
order dated 23.03.2020 passed in Suo Motu Civil Writ Petition
No. 03/2020 directed the period commencing from 15.03.2020 to
be excluded for the purposes of computation of limitation. The
said extension of limitation was extended from time to time by
this Court in view of the continuing pandemic. As a result, the
period from 15.03.2020 to 28.02.2022 was finally determined to
be excluded for the computation of limitation. It was provided
that the balance period of limitation as available on 15.03.2020
would become available from 01.03.2022. Operative part of the
order dated 10.01.2022 is extracted herein below:
…………………..
83. The operation and effect of the aforesaid order was
considered and explained by a two-Judge Bench of this Court in
Prakash Corporates v. Dee Vee Projects Ltd., reported in (2022) 5
SCC 112 as follows:
CS(Comm) No. 1344/2023 Page no. 8 of 11
-- 8 of 11 --
“28. As regards the operation and effect of the orders
passed by this Court in SMWP No. 3 of 2020, noticeable it
is that even though in the initial order dated 23-3-2020
[Cognizance for Extension of Limitation, In re, (2020) 19
SCC 10 : (2021) 3 SCC (Cri) 801], this Court provided that
the period of limitation in all the proceedings, irrespective
of that prescribed under general or special laws, whether
condonable or not, shall stand extended w.e.f. 15-3-2020
but, while concluding the matter on 23-9-2021
[Cognizance for Extension of Limitation, In re, (2021) 18
SCC 250 : 2021 SCC OnLine SC 947], this Court
specifically provided for exclusion of the period from 15-
3-2020 till 2-10-2021. A look at the scheme of the
Limitation Act, 1963 makes it clear that while extension of
prescribed period in relation to an appeal or certain
applications has been envisaged under Section 5, the
exclusion of time has been provided in the provisions like
Sections 12 to 15 thereof. When a particular period is to be
excluded in relation to any suit or proceeding, essentially
the reason is that such a period is accepted by law to be the
one not referable to any indolence on the part of the
litigant, but being relatable to either the force of
circumstances or other requirements of law (like that of
mandatory two months' notice for a suit against the
Government [Vide Section 15 of the Limitation Act,
1963.]). The excluded period, as a necessary consequence,
results in enlargement of time, over and above the period
prescribed.” (emphasis supplied)
84. The effect of the above-referred order of this Court in the
facts of the present case is that the balance limitation left on
15.03.2020 would become available w.e.f. 01.03.2022. The
balance period of limitation remaining on 15.03.2020 can be
calculated by computing the number of days between 15.03.2020
and 27.03.2021, which is the day when the limitation period
would have come to an end under ordinary circumstances. The
balance period thus comes to 1 year 13 days. This period of 1
year 13 days becomes available to the petitioner from
01.03.2022, thereby meaning that the limitation period available
to the petitioner for invoking arbitration proceedings would have
come to an end on 13.03.2023.’
(Emphasis supplied)
11. Coming back to facts of the present case, it can thus be
seen that even a period of 6 months had yet not expired from
26.09.2019 till 15.03.2020 and hence, a further period of more
CS(Comm) No. 1344/2023 Page no. 9 of 11
-- 9 of 11 --
that 2½ years was still available to the plaintiff for filing of the
present suit on above date and this period has to be made
available to him on date 01.03.2022 as per the above said
guidelines. Moreover, this is besides the period spent by him in
pre-institution mediation proceedings in terms of provisions
contained in second proviso to sub-section (3) of Section 12A of
the Commercial Courts Act as it lays down that the period during
which the parties remained occupied with the pre-institution
mediation shall not be computed for the purpose of limitation
under the Limitation Act, 1963.
12. As also discussed above, the present suit has been filed by
plaintiff on 10.10.2023 i.e. just after 1 year, 7 months and 10
days from the above date 01.03.2022 and thus, in any case and
going by any eventuality, the same is within the period of
limitation. The order dated 04.07.2023 of the court of Ld. District
Judge (Comm) Court-02, West/THC Extn. Block being referred
to by Ld. Counsel for defendant has no application to the facts of
present case as in the said case, the period of limitation expired in
between the period from 15.03.2020 to 28.02.2022 and it did not
expire after 28.02.2022 and hence, in terms of the above
guidelines laid by the Hon’ble Supreme Court in case of Re:
Cognizance for Extension of Limitation (Supra), it was held by
the Ld. District Judge (Comm) Court-02, West/THC that the suit
of plaintiff of the said case was required to be filed within a
period of 90 days from 01.03.2022, in addition to the period
spent in pre-institution mediation i.e. from 19.04.2021 to
13.08.2021. The limitation in said case expired on 29.05.2022
CS(Comm) No. 1344/2023 Page no. 10 of 11
-- 10 of 11 --
and after giving the benefit of above extended period of 90 days
and also for the pre-institution mediation period from 19.04.2021
to 13.08.2021, the same was held to have expired on 23.09.2022,
but since the said suit by plaintiff was found to have been filed
on 16.02.2023, in the above circumstances, it was held by the Ld.
District Judge (Comm) Court-02, West/THC that the same was
hopelessly barred by limitation.
13. Therefore, in view of the above factual and legal
discussion, it is held that the present suit filed by plaintiff is very
much within the period of limitation prescribed therefor and
hence, there is no merit in the present application filed by
defendant under the provisions of Order 7 Rule 11 CPC seeking
rejection of the plaint and the same is held to have been filed on
false and frivolous grounds and also belatedly and is, therefore,
being dismissed with a cost of Rs. 10,000/- to be paid by
defendant to the plaintiff.
14. As already discussed, since issue no.1 on the above point
of limitation was also earlier framed by the court and onus to
prove the same was placed upon the defendant, the said issue
shall now also stand decided accordingly in favour of the plaintiff
and against the defendant in terms of this order.
Announced in the open court (M. K. Nagpal)
Dated: 10.05.2024 District Judge, Commercial Court-13
Central District, Tis Hazari Courts,
Delhi/10.05.2024
CS(Comm) No. 1344/2023 Page no. 11 of 11
-- 11 of 11 --