The Calcutta High Court has recognized the need to amend the Original Side Rules governing the acceptance of counterclaims and replies in commercial cases. Highlighting the rigid framework of Section 18 of the Commercial Courts Act, a division bench of Justices Soumen Sen and Biswaroop Chowdhury has issued guidelines to streamline the process until formal amendments are introduced.
The court observed that under the Commercial Courts Act, the filing of pleadings, including written statements and counterclaims, is strictly regulated. The bench stated that due to the stringent provisions of the Act regarding the submission of written statements, amendments to the Original Side Rules are essential. It emphasized that the obligation to file a written statement arises only after a writ of summons and the plaint are served upon the defendant. Similarly, a reply to a counterclaim, which is treated as a written statement, must be filed within 120 days from the date an authenticated copy of the written statement with the counterclaim is served.
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Until official amendments are introduced, the Calcutta High Court has issued practice directions. Effective March 1, 2025, the Commercial Division must scrutinize every counterclaim before issuing a summons, similar to the procedure followed for plaints. Within seven working days of filing the counterclaim, the registry of the Commercial Division must serve notice to the plaintiff or their advocate. The defendant must rectify any curable defects within two weeks of being notified. Failure to do so will result in the matter being referred to the Commercial Division. The plaintiff’s deadline for submitting a written statement in response to a counterclaim will be calculated from the date of service of notice by the registry. Additionally, all documents relied upon by the defendant must be provided to the plaintiff at the time of serving the counterclaim notice.
The case in question, A K Ghosh and Company & Ors. v. Biman Bose & Ors., involved a dispute over whether the 120-day timeline specified in Order VIII Rule 1 of the Commercial Courts Act applies to a plaintiff's reply to a counterclaim. The Single Judge refused to extend the deadline and rejected the plaintiff’s request for additional time. The appeal focused on the right of appeal under the Commercial Courts Act. The respondent’s senior counsel cited Section 13(1-A), arguing that appeals can only be filed against orders explicitly listed under Order XLIII of the Code of Civil Procedure. The court agreed, emphasizing that an appeal is a statutory right and cannot be presumed beyond what is explicitly permitted.
The appellant argued that the Commercial Courts Act does not explicitly address the right to file additional pleadings. The appellant also pointed out that no amendments had been made to the Code of Civil Procedure regarding the timeline for filing a reply to a counterclaim. However, the court clarified that under Order VIII Rule 6A(3) of the CPC, the plaintiff must respond to a counterclaim within the court's prescribed timeframe. It ruled that counterclaims are treated as plaints, and subsequent pleadings must comply with the provisions of the Commercial Courts Act.
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The judgment highlights the need for clarity in procedural rules, as the absence of explicit provisions regarding counterclaim replies has caused procedural confusion. The High Court’s guidelines aim to ensure consistency until official amendments are made. The ruling also reinforces the importance of adhering to strict deadlines for filing pleadings in commercial disputes to enhance efficiency and prevent litigation delays. Additionally, the judgment underscores the limited scope of appeals under the Commercial Courts Act, which are restricted to orders outlined in Order XLIII of the CPC and Section 37 of the Arbitration Act.
By issuing these guidelines, the Calcutta High Court seeks to address procedural uncertainties in commercial litigation. The decision is expected to improve legal clarity for practitioners and litigants, ensuring that counterclaims are processed efficiently and fairly within the established legal framework.
Case: A K GHOSH AND COMPANY AND ORS. VERSUS BIMAN BOSE AND ORS.
Case No: CS-COM/440/2024
