India: Limitation Period Extension On Account Of Covid-19 Applies To Delay That Can Be Statutorily Condoned: Supreme Court Of India

The Hon'ble Supreme Court in a recent order in Centaur Pharmaceuticals Pvt. Ltd. and Anr. v. Standford Laboratories Pvt. Ltd.¹ observed that the Apex Court's suo motu order extending limitation period on account of COVID-19 would also include the period which can be condoned in exercise of the statutory discretion.

The Apex Court's order came as it upheld a Madras High Court ("High Court") order in Stanford Laboratories Pvt. Ltd. v. Centaur Pharmaceuticals Pvt. Ltd. and Anr.² which had placed reliance on the Apex Court's suo motu order³ dated 8 March 2020 to condone delay in a commercial suit for filing written statement.

Brief Facts

The underlying matter relates to a patent infringement suit before the Madras High Court where Stanford Laboratories Pvt. Ltd. ("Stanford") and La Renon Health Care Pvt. Ltd. ("La Renon") had filed applications seeking condonation of delay in filing of their written statements. Centaur Pharmaceuticals Pvt. Ltd. ("Centaur") and Kibow Biotech Inc. ("Kibow") were the respondent/ plaintiffs in the said matter.

The law concerning the matter is contained under Order VII Rule 1 of the Civil Procedure Code, 1908 ("CPC"). Order VII Rule 1 of the CPC provides a 30 (thirty) day timeline for filing a written statement from the date of receipt of summons of the suit. A court is further empowered with the discretion to grant another 90 (ninety) days to file the written statement upon the defendant giving 'cogent reasons' for the delay.

In the present matter, the 30 (thirty) day timeline for Stanford to file its written statement expired on 22 February 2020. Similarly, the 30 (thirty) day timeline for La Renon expired on 9 February 2020. Taking the court's discretion to condone delay into account, the limitation for Stanford expired on 23 May 2020 and for La Renon on 10 May 2020. However, both Stanford and La Renon filed their written statements by 14 July 2020.

Contentions of Stanford and La Renon

The applicants/ defendants before the High Court placed reliance upon the orders passed by the Hon'ble Supreme Court in Re Cognizance for Extension of Limitation and the notification issued by the High Court dated 13 July 2020 for computing the period of delay. Both Stanford and La Renon submitted that being a patent related matter which was highly technical in nature, the applicants/ defendants were required to conduct ample research, tests and collect information prior to drafting the written statement.

Contentions of Centaur and Kibow

The respondents/ plaintiffs strongly opposed the application on the ground that the limitation prescribed under Order VII Rule 1 of CPC was non-negotiable as far as suits under Commercial Courts Act, 2015 were concerned. The respondents/ plaintiffs argued that the applicants had wrongly computed the period of limitation. Reliance was also placed on the decision in Sagufa Ahmed and Ors. v. Upper Assam Plywood Products Pvt. Ltd. and Ors.⁴ to argue that the order dated 23 March 2020 passed in Re: Cognizance for Extension of Limitation did not cover the period of delay that could be condoned by a court of law in exercise of statutory discretion.

Decision of High Court

The High Court relied on the order dated 8 March 2021 rendered in Re: Cognizance for Extension of Limitation and held that the delay in filing the written statement had to be condoned, since for computation of limitation the period from 15 March 2020 to 14 March 2021 was to be excluded. In result, the applications were allowed subject to payment of a cost of Rs. 50,000/- (Rupees fifty thousand).

Decision of the Hon'ble Supreme Court

The moot question in the instant matter was whether the 90 (ninety) day period for which delay can be condoned as per statutory discretion was covered under the scope of the suo motu order of the Apex Court extending limitation.

The Hon'ble Supreme Court observed that in the facts and circumstances of the case, the "High Court has not committed any error in extending the period of limitation in filing the written statement and consequently taking on record the written statement". The Apex Court observed that the period of limitation stood extended up to 7 October 2021 through various orders rendered time to time in Re: Cognizance for Extension of Limitation.

Comments

The order of the Hon'ble Supreme Court provides much needed clarity on a crucial aspect i.e., applicability of the suo motu order extending limitation on the statutorily condonable delay period. The order is in recognition of the difficulties faced by the bar as well as the bench on account of the onset of various waves of the COVID-19 global pandemic. Hence, the order is a welcome development.

Footnotes

1 Petition(s) for Special Leave to Appeal (C) No(s). 17298/2021.

2 Stanford Laboratories Pvt. Ltd. v. Centaur Pharmaceuticals Pvt. Ltd. and Anr., A. Nos. 2056 & 2064 of 2020 in C.S. (Comm. Div.) No. 684 of 2019.

3 In Re Cognizance for Extension of Limitation, Suo Motu Writ (Civil) No. 3 of 2020.

4 Sagufa Ahmed and Ors. v. Upper Assam Plywood Products Pvt. Ltd. and Ors., 2021 2 SCC 317.

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