Punjab & Haryana High Court holds that the mandatory time-limits for filing written statements under Order VIII Rule 1 CPC are directory in non-commercial suits, not fatal. The Court overrules prior reliance on SCG Contracts (which applies only to commercial suits), remitting the matter for trial. The judgment is a binding precedent for all subordinate courts handling similar civil matters in Punjab & Haryana.
Summary
| Category | Data |
|---|---|
| Case Name | RSA/305/2021 of PUNJAB STATE GRAIN PROCUREMENT CORPORATION LIMITED AND OTHERS Vs M/S GILL RICE MILLS CNR PHHC010475592021 |
| Related Cases | RSA/305/2021; RSA/199/2021; CR-4288-2019 (All heard together, main facts from RSA/305/2021) |
| Date of Registration | 25-05-2021 |
| Decision Date | 28-10-2025 |
| Disposal Nature | ALLOWED (RSA-305-2021); Other appeals disposed per findings |
| Judgment Author | MR. JUSTICE VIKRAM AGGARWAL |
| Court | High Court of Punjab and Haryana |
| Precedent Value | Binding on all subordinate courts within jurisdiction; persuasive for other High Courts and Supreme Court |
| Overrules / Affirms |
|
| Type of Law | Procedural Civil Law—Code of Civil Procedure (Order VIII Rule 1), Arbitration & Conciliation Act (Section 8) |
| Questions of Law |
|
| Ratio Decidendi |
The Court held that the time-limits for filing a written statement under Order VIII Rule 1 CPC are directory, not mandatory, in non-commercial disputes. An application under Section 8 of the Arbitration Act, if timely, suspends the need to file a written statement until decided. The Court clarified that SCG Contracts (relied on by trial and lower appellate courts) applies only to commercial disputes; for non-commercial disputes, delay may be condoned and striking off of defence is not automatic. Relying upon Deshraj v Balkishan (2020) and Rashtriya Ispat Nigam Ltd. v Verma Transport (2006), the Court found that the Procurement Agency’s defence should not have been struck off solely for this procedural lapse. The prior orders of the trial and appellate courts were set aside, and the suit remitted for fresh trial on merits. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon by the Court |
Examined Section 8 of Arbitration & Conciliation Act and Order VIII Rule 1 CPC; Interpreted the application of SCG Contracts (mandatory timeline) to commercial, not non-commercial suits; Emphasized settled law that for non-commercial disputes, procedural delay in written statement filing may be condoned at courts’ discretion. |
| Facts as Summarised by the Court |
Dispute arose from custom-milling agreement for paddy, devolving into complex litigation and delays. Procurement Agency’s defence struck off for non-filing written statement within prescribed time—even though application under Section 8 of Arbitration Act was pending. Appeals and revision challenged the procedural orders striking off defence. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within jurisdiction of Punjab & Haryana High Court |
| Persuasive For | Other High Courts and the Supreme Court |
| Overrules | Overrules use of SCG Contracts (2019) as binding for non-commercial suit written statement timelines |
| Distinguishes | Distinguishes SCG Contracts as relevant only for commercial disputes |
| Follows | Follows Deshraj v. Balkishan (2020) and Rashtriya Ispat Nigam Ltd. v. Verma Transport (2006) (Supreme Court) |
What’s New / What Lawyers Should Note
- SCG Contracts applies strictly to commercial disputes—its mandatory timeline for written statement filing does not extend to non-commercial suits.
- For non-commercial civil suits, courts retain discretion to accept written statements beyond prescribed periods under Order VIII Rule 1 CPC.
- Filing an application under Section 8 of the Arbitration Act (before substance statement) rightfully suspends the need to file a written statement until the application is decided.
- Courts must prioritize adjudication on merits over technical procedural lapses (when delay is short and not willful).
- Future matters where a written statement is not filed due to Section 8 application pendency in non-commercial matters can rely on this as a binding precedent in Punjab & Haryana.
Summary of Legal Reasoning
- The Court analyzed Section 8 of the Arbitration Act, clarifying that an application for reference to arbitration must be filed before the “first statement on the substance of the dispute” and that a written statement is not required during its pendency.
- The distinction was drawn between commercial and non-commercial disputes. In non-commercial disputes, Order VIII Rule 1 CPC is directory (not mandatory)—a judicial discretion allows condonation of delay in filing the written statement.
- The Supreme Court’s decision in Deshraj v. Balkishan was relied upon, holding that the rigid time-limits for filing a written statement do not apply for non-commercial disputes; only commercial cases (as per SCG Contracts) fall under the mandatory regime.
- The trial and first appellate courts erred by relying on SCG Contracts to strike off the defence in a non-commercial suit.
- The delay between service and filing written statement was not inordinate, and the case involved public funds; thus, the Courts should not have non-suited the Procurement Agency on technical grounds.
- The matter was remitted for trial, ordering the trial court to decide promptly.
Arguments by the Parties
Petitioner (Procurement Agency)
- Trial Court erred in striking off defence; application under Section 8 Arbitration Act had been filed at first opportunity.
- Filing a written statement during pendency of Section 8 application is not permissible.
- Delay was not deliberate; lower courts wrongly applied SCG Contracts (which applies to commercial, not non-commercial suits).
- Sought setting aside of procedural orders and remand for decision on merits.
Respondent (Miller)
- The order striking off defence had attained finality; Supreme Court did not interfere.
- Liberty granted by the Supreme Court was limited to pleadings on merits, not to procedural challenge.
- Sequence of events justifies the striking off of defence due to persistent lapse.
- Reiterated high-handedness by Procurement Agency as a cause for hardship.
Factual Background
The dispute was between a state grain procurement agency and a rice miller concerning custom milling of paddy for the 2012–13 season. The agency alleged that the miller failed to return the processed rice after receiving paddy. Litigation ensued, involving multiple writ petitions, civil suits, arbitration proceedings, and a criminal case (FIR under Sections 406 and 420 IPC). In the fresh civil suit for recovery, the agency’s defence was struck off for failing to file a written statement within the stipulated time, even though an arbitration application was pending. Both parties appealed the subsequent outcomes.
Statutory Analysis
- Section 8, Arbitration & Conciliation Act, 1996: Application must be made before submitting the first substantive statement; as per Rashtriya Ispat Nigam (SC), reply to interim application is not the ‘first statement.’ Filing an application under Section 8 suspends the obligation to file a written statement until the application is decided.
- Order VIII Rule 1 CPC: Sets a 30/90/120 day period for written statement. Interpreted as directory (not mandatory) for non-commercial disputes; mandatory only for commercial suits post-Commercial Courts Act. Time limit may be extended at the court’s discretion for non-commercial suits.
Dissenting / Concurring Opinion Summary
No dissenting or concurring opinions are recorded in the judgment.
Procedural Innovations
- The Court clarified and reset the procedural approach for allowing written statements post-Section 8 applications in non-commercial suits.
- Specific direction for expeditious trial on remand (one-year period) given the decade-long pendency.
Alert Indicators
- ✔ Precedent Followed – Court affirms Supreme Court interpretations (Deshraj, Rashtriya Ispat Nigam) for non-commercial disputes.
- 🚨 Breaking Precedent – Explicitly overrules prior application of SCG Contracts (2019) for non-commercial suits in this jurisdiction.